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, 1996 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 9, 1996 16,513,308
----------
No. of Pages 10
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
PART 1. Financial Information
Item 1. Consolidated Financial Statements
<TABLE>
<CAPTION>
March 31, September 30,
1996 1995
---- ----
(Unaudited) Restated
(Note 2)
ASSETS
<S> <C> <C>
Current Assets:
Cash and cash equivalents ................................................................... $ 17,585,000 $ 16,424,000
Investments (Note 3) ........................................................................ 1,000,000 1,000,000
Receivable - net (including unbilled
receivables of $1,928,000 at March 31, 1996
and $1,298,000 at September 30, 1995) ....................................................... 14,744,000 12,082,000
Inventories (Note 4) ........................................................................ 13,386,000 8,461,000
Deferred income taxes ....................................................................... 2,375,000 2,375,000
Prepaid expenses and other current assets ................................................... 528,000 154,000
------------- -------------
Total current assets ............................................... 49,618,000 40,496,000
Plant equipment - net ....................................................................... 5,584,000 4,145,000
Other assets ................................................................................ 2,061,000 1,748,000
Investments (Note 3) ........................................................................ 992,000 1,989,000
------------- -------------
TOTAL .............................................................. $ 58,255,000 $ 48,378,000
============= =============
LIABILITIES
Current Liabilities:
Accounts payable ............................................................................ $ 8,606,000 $ 7,988,000
Loan payable (Note 6) ....................................................................... 2,128,000 1,385,000
Accrued Expenses and Other Current Liabilities .............................................. 4,666,000 5,473,000
Note Payable ................................................................................ -- 270,000
Advance Contract Payments Received .......................................................... 515,000 1,078,000
------------- -------------
Total Current Liabilities ........................................... 15,915,000 16,194,000
Other Liabilities ........................................................................... 211,000 78,000
------------- -------------
Total Liabilities .................................................. 16,126,000 16,272,000
STOCKHOLDERS' EQUITY
Common stock, authorized 30,000,000 shares, $.01 par value; issued and
outstanding 16,497,000 shares at March 31, 1996 and
15,175,000 shares at September 30, 1995 .......................................................... 165,000 152,000
Additional paid-in capital ....................................................................... 111,973,000 109,834,000
Accumulated deficit .............................................................................. (70,132,000) (78,023,000)
Cumulative translation adjustment ................................................................ 123,000 143,000
------------- -------------
Total Stockholders' Equity ........................................................ 42,129,000 32,106,000
------------- -------------
TOTAL ............................................................................. $ 58,255,000 $ 48,378,000
============= =============
</TABLE>
-2-
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six Month Ended Three Months Ended
March 31, March 31,
------------------------------- ------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues ............................................... $ 41,460,000 $ 28,168,000 $ 20,998,000 $ 14,483,000
Cost of Revenues ....................................... 17,267,000 12,335,000 8,506,000 6,339,000
------------ ------------ ------------ ------------
Gross Profit ...................................... 24,193,000 15,833,000 12,492,000 8,144,000
Research and Development Costs ......................... 6,213,000 4,671,000 3,183,000 2,487,000
Selling, General and Administrative Expenses ........... 9,999,000 7,766,000 5,387,000 4,158,000
Merger Expenses ........................................ 226,000 440,000 2,000 --
Interest Income - Net ................................. (478,000) (43,000) (252,000) (41,000)
------------ ------------ ------------ ------------
Income Before Provision for Income taxes .......... 8,233,000 2,999,000 4,172,000 1,540,000
Provision (Benefit) for Income Taxes ................... 342,000 (2,067,000) 167,000 (2,606,000)
------------ ------------ ------------ ------------
Net Income ............................................. $ 7,891,000 $ 5,066,000 $ 4,005,000 $ 4,146,000
============ ============ ============ ============
Net Income Per Common Share ............................ $ .45 $ .33 $ .23 $ .27
============ ============ ============ ============
</TABLE>
-3-
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
-----------------------------
1996 1995
----- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income...................................................................... $ 7,891,000 $ 5,066,000
Adjustments to reconcile net income to cash used in operating activities:
Deferred income taxes........................................................... -- (2,266,000)
Depreciation and amortization................................................... 959,000 698,000
Issuance of common stock - defined contribution stock
ownership and deferred compensation plan .................................. -- 60,000
Provision for doubtful receivable............................................... -- 20,000
Issuance of warrants for professional services rendered........................ -- 14,000
Other........................................................................... (25,000) (80,000)
Changes in assets & liabilities:
Receivables............................................................ (2,644,000) (2,068,000)
Inventories............................................................ (4,925,000) (2,623,000)
Prepaids & other current assets........................................ (352,000) (121,000)
Other assets .......................................................... (508,000) (290,000)
Accounts payable ...................................................... 600,000 2,528,000
Accrued expenses ...................................................... (647,000) (231,000)
Advanced contract payments received.................................... (563,000) (1,241,000)
Other liabilities ..................................................... (26,000) 3,000
----------- -----------
Net cash used in operating activities........................................... (240,000) (531,000)
----------- -----------
INVESTING ACTIVITIES:
Additions to plant & equipment.................................................. (2,203,000) (1,005,000)
Investments..................................................................... (993,000)
Proceeds from the maturities investments........................................ 1,000,000 -
Net cash used in investing activities........................................... (1,203,000) (1,998,000)
----------- -----------
FINANCING ACTIVITIES:
Issuance of Common Stock and warrants - private
equity placement (less offering costs)...................................... -- 920,000
options and warrants ........................................................... 2,151,000 249,000
Notes payable other ............................................................ (270,000) 567,000
Proceeds from bank loan ........................................................ 743,000 450,000
Payment of S.T. debt & related accrued interest................................. -- (163,000)
----------- -----------
Net cash used in financing activities........................................... 2,624,000 2,023,000
----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS..................................................................... (20,000) 8,000
----------- -----------
NET INCREASE/ DECREASE IN CASH.................................................. 1,161,000 (498,000)
CASH - BEGINNING OF YEAR........................................................ 16,424,000 1,790,000
----------- -----------
CASH - END OF YEAR.............................................................. 17,585,000 1,292,000
=========== ===========
SUPPLEMENTAL INFORMATION:
Interest paid................................................................... 81,000 65,000
=========== ===========
Taxes paid ..................................................................... 158,000 277,000
=========== ===========
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Notes payable and accrued interest satisfied by private offering of
common stock .............................................................. -- 785,000
=========== ===========
Accounts payable satisfied by private offering of common stock.................. -- 60,000
=========== ===========
</TABLE>
-4-
<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 March 31, 1996, the condensed
consolidated statements of operations for the three and six month periods ended
March 31, 1996 and 1995 and the condensed consolidated statements of cash flows
for the six month periods ended March 31, 1996 and 1995 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 March 31, 1996 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 March 31, 1996
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 Six Months
Ended Ended
March 31, 1995 March 31, 1995
-------------- --------------
<S> <C> <C>
Revenues:
As previously reported ................................... $ 9,071,000 $ 16,600,000
Effect of Acuity and IDM poolings of
interests ............................................ 5,412,000 11,568,000
------------ ------------
As restated .............................................. $ 14,483,000 $ 28,168,000
============ ============
Net Income:
As previously reported ................................... $ 4,463,000 $ 5,282,000
Effect of Acuity and IDM poolings of
interests ........................................... (317,000) (216,000)
------------ ------------
As restated .............................................. $ 4,146,000 $ 5,066,000
============ ============
Net income per share:
As previously reported ................................... $ 0.32 $ 0.38
Effect of Acuity and IDM poolings of
interests ............................................ (0.05) (0.05)
------------ ------------
As restated .............................................. $ 0.27 $ 0.33
============ ============
</TABLE>
-5-
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-CONTINUED
(Unaudited)
3. Investments
At March 31, 1996 and September 30, 1995, investments consisted of certain debt
securities issued by the United States government with maturities through
November 1997.
4. Inventories
Inventories at March 31, 1996 and September 30, 1995 consisted of the following:
March 31, 1996 September 30, 1995
-------------- ------------------
Raw Materials $ 4,561,000 $ 2,223,000
Work-in-Process 8,307,000 5,515,000
Finished Goods 518,000 533,000
Field Engineering Parts
and Components -- 190,000
----------- -----------
Total $13,386,000 $ 8,461,000
=========== ===========
5. Income Taxes
The provision for income taxes for the six months ended March 31, 1996 and 1995
consisted of the following:
1996 1995
---- ----
Current provision $ 342,000 $ 199,000
Deferred provision - 1,036,000
Adjustment of valuation allowance - (3,302,000)
---------- -----------
Total $ 342,000 $(2,067,000)
========== ===========
6. Loan Payable
The Company has 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.
-6-
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
Item 2. Management's discussion and analysis of financial condition results of
operations.
Three and Six Months Ended March 31, 1996 and 1995
Results of Operations
Revenues of $41,460,000 for the six months ended March 31, 1996 represent an
increase of $13,292,000 or approximately 47%, in comparison to revenues of
$28,168,000 for the six months ended March 31, 1995 For the three months ended
March 31, 1996 revenues of $20,998,000 represent an increase of $6,515,000 or
approximately 45%, over the comparable period in 1995. 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 six months ended March 31, 1996 and March 31, 1995
were 58% and 56%, respectively. The increase in gross profit margins during
fiscal 1996 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 $6,213,000 and $3,183,000 in research and
development expense during the six and three months ended March 31, 1996 as
contrasted with $4,671,000 and $2,487,000 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 six
and three months ended March 31, 1996, $473,000 and $347,000, respectively, of
these costs were capitalized as compared to $273,000 and $154,000, respectively,
for the comparable period in fiscal 1995.
Selling, general and administrative costs increased by $2,233,000, or
approximately 29%, and $1,229,000, or approximately 30%, for the six and three
months ended March 31, 1996 as compared to the prior comparable period,
primarily as a result of increased marketing and distribution costs. The Company
incurred $226,000 for merger expenses for the six months ended March 31, 1996
relating to the acquisition of I.D. Matrix by the Company on October 23, 1995.
Net income for the six months ended March 31, 1996 was $7,891,000, or $.45 per
share as compared to net income of $5,066,000, or $.33 per share (inclusive of a
tax benefit of $.21 per share related to the anticipated future utilization of
net operating loss carryforwards and other deferred tax assets) for the six
months ended March 31, 1995. Net income for the three months ended March 31,
1996 was $4,005,000, or $.23 per share as compared to net income of $4,146,000,
or $.27 (inclusive of a tax benefit of $.21 per share related to the anticipated
future utilization of net operating loss carryforwards and other deferred tax
assets) per share for the three months ended March 31, 1995.
-7-
<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 six months
ended March 31, 1996 generated net cash and cash equivalents of $1,161,000 as
follows:
- Operating activities utilized $240,000 during the six months ended
March 31, 1996;
- $1,000,000 was generated from the maturity of short-term investments;
- $2,203,000 was used to purchase property and equipment, primarily
leasehold improvements and office furniture and equipment, during the
six months ended March 31, 1996;
- $2,151,000 was generated through the issuance of common stock upon the
exercise of stock options and warrants;
- $270,000 was used to repay notes payable;
- $743,000 was provided through borrowings under a line of credit
facility;
- The effect of exchange rate changes reduced cash and cash equivalents
by $20,000;.
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. Availability under this line of credit
was $3,865,000 at March 31, 1996.
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 adjustment 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 in 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 six months ended March 31, 1996 the effect
of inflation was not material.
-8-
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
Part II. Other Information
Item 4. Submission of matters to a vote of Security Holders. The Company held
its Annual Meeting of Stockholders on March 28, 1996.
(a) The following eight directors were elected at the meeting to
serve for a term of one year or until their respective successors
are elected and qualified.
Pat V. Costa Donald J. Kramer
Frank A. DiPietro Mark J. Lerner
Donald F. Domnick Howard Stern
Jay M. Haft Robert H. Walker
(b) A proposal to adopt the Robotic Vision Systems, Inc., 1996 Stock
plan was also voted upon at the annual meeting. The number of
affirmative votes and the number of negative votes cast were
8,754,794 and 1,027,176, respectively.
(c) Registrant reported the ratification and the approval of the
appointment of Deloitte & Touche LLP as the Company's independent
auditors for its fiscal year ending September 30, 1996. The
number of affirmative votes and the number of negative votes cast
were 15,123,244 and 56,275, respectively.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Statement regarding computation of net income per
common share.
(b) Exhibit 27 - Financial Data Schedule.
(c) Registrant filed an amended 8-K Report on January 5, 1996 to
include therein requisite audited historical financial statements
and related notes of International Data Matrix, Inc.("IDM"), as
well as requisite unaudited pro forma financial statements and
related notes of Registrant giving effect to Registrant's
acquisition by merger of IDM on October 23, 1995.
-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 13, 1996 /s/ PAT V. COSTA
------------------------------
PAT V. COSTA
President and CEO
(Principal Executive Officer)
Dated: May 13, 1996 /s/ ROBERT H. WALKER
------------------------------
ROBERT H. WALKER
Executive Vice President and Treasurer
(Principal Financial Officer)
-10-
ROBOTIC VISION SYSTEMS, INC AND SUBSIDIARIES EXHIBIT 11
COMPUTATION OF PER SHARE ACCOUNTS
<TABLE>
<CAPTION>
Six Months Ended
--------------------------------
March 31, 1996 March 31, 1995
--------------- ---------------
<S> <C> <C>
Net income ............................................... $ 7,891,000 $ 5,066,000
=========== ===========
Weighted average number of common shares ................. 15,900,000 13,299,000
Assumed number of shares issued from common share
equivalents .......................................... 1,743,000 2,175,000
----------- -----------
Weighted average number of common and common
equivalent shares .................................... 17,643,000 15,474,000
=========== ===========
Net income per share ..................................... $ 0.45 $ 0.33
=========== ===========
<CAPTION>
Three Months Ended
--------------------------------
March 31, 1996 March 31, 1995
--------------- ---------------
<S> <C> <C>
Net income ............................................... $ 4,005,000 $ 4,146,000
=========== ===========
Weighted average number of common shares ................. 16,299,000 13,346,000
Assumed number of shares issued from common share
equivalents ........................................... 1,279,000 2,161,000
----------- -----------
Weighted average number of common and common
equivalent shares ..................................... 17,578,000 15,507,000
=========== ===========
Net income per share ..................................... $ 0.23 $ 0.27
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000225868
<NAME> Robotic Vision Systems, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 17,585
<SECURITIES> 1,992
<RECEIVABLES> 14,744
<ALLOWANCES> 0
<INVENTORY> 13,386
<CURRENT-ASSETS> 49,618
<PP&E> 5,584
<DEPRECIATION> 0
<TOTAL-ASSETS> 58,255
<CURRENT-LIABILITIES> 15,915
<BONDS> 0
165
0
<COMMON> 0
<OTHER-SE> 41,964
<TOTAL-LIABILITY-AND-EQUITY> 58,255
<SALES> 0
<TOTAL-REVENUES> 20,998
<CGS> 8,506
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,572
<LOSS-PROVISION> 0
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<INCOME-PRETAX> 4,172
<INCOME-TAX> 167
<INCOME-CONTINUING> 0
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<NET-INCOME> 4,005
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
