<PAGE>
As Filed with the Securities and Exchange Commission on January 30, 1997
Registration No. 333-20209
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
ROBOTIC VISION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2400145
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
425 Rabro Drive East
Hauppauge, New York 11788
(516) 273-9700
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
PAT V. COSTA
President and Chief Executive Officer
Robotic Vision Systems, Inc.
425 Rabro Drive East
Hauppauge, New York 11788
(516) 273-9700
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications and notices to:
IRA I. ROXLAND, Esq.
Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, New York 10017
Tel: (212) 599-0500
Fax: (212) 972-9487
Approximate date of commencement of proposed sale to the public: At such
time after the effective date of this Registration Statement as the Selling
Stockholders shall determine.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.[_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box.[X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<TABLE>
<CAPTION>
==================================================================================================
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------
Title of Shares to Amount to Proposed Maximum Proposed Maximum
be Registered be Offering Price Aggregate Offering Amount of
Registered Per Share* Price* Registration Fee
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par
value............ 3,024,374 $18.00 $54,438,732.00 $16,496.58
shs.
==================================================================================================
</TABLE>
* Estimated solely for the purpose of calculating the registration fee pursuant
to Rule 457(c).
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
-------------------------
Subject to Completion - Preliminary Prospectus dated January 30, 1997
-------------------------
Prospectus
3,024,374 Shares
ROBOTIC VISION SYSTEMS, INC.
Common Stock
-------------------------
This Prospectus relates to 3,024,374 shares of common stock, par value
$0.01 per share (the "Common Stock"), of Robotic Vision Systems, Inc. (the
"Company"), which shares are being offered for sale by the persons named herein
under the caption "Selling Stockholders" (the "Selling Stockholders"). The
Company will not receive any of the proceeds from the sale of shares by the
Selling Stockholders. See "Selling Stockholders."
The Common Stock is quoted on The Nasdaq National Market (the "NASDAQ-NM")
under the symbol "ROBV." On January , 1997, the closing last sale price
of the Common Stock as reported by the NASDAQ-NM was $ per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Selling Stockholders, or their pledgees, donees, transferees or other
successors, may sell the Common Stock in any of three ways: (i) through broker-
dealers; (ii) through agents or (iii) directly to one or more purchasers. The
distribution of the Common Stock may be effected from time to time in one or
more transactions (which may involve crosses or block transactions) (A) in the
over-the-counter market, or (B) in transactions otherwise than in the over-the-
counter market. Any of such transactions may be effected at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices or at fixed prices. The Selling Stockholders may
effect such transactions by selling the Common Stock to or through broker-
dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or
commissions from purchasers of the Common Stock for whom they may act as agent
(which discounts, concessions or commissions will not exceed those customary in
the types of transactions involved). The Selling Stockholders and any broker-
dealers or agents that participate in the distribution of the Common Stock might
be deemed to be underwriters, and any profit on the sale of the Common Stock by
them and any discounts, commissions or concessions received by any such broker-
dealers or agents might be deemed to be underwriting discounts and commissions
under the Securities Act of 1933, as amended (the "Securities Act").
The Company has agreed to bear all expenses (other than selling discounts,
concessions and commissions) in connection with the registration and sale of the
Common Stock being offered by the Selling Stockholders. The Company has agreed
to indemnify the Selling Stockholders against certain liabilities, including
liabilities under the Securities Act.
The Common Stock being offered hereby by the Selling Stockholders has not
been registered for sale under the securities laws of any state or jurisdiction
as of the date of this Prospectus. Brokers or dealers effecting transactions in
the Common Stock should confirm the registration thereof under the securities
law of the state in which such transactions occur, or the existence of any
exemption from registration.
The date of this Prospectus is , 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
The Company.................................................................. 1
Available Information........................................................ 2
Incorporation of Certain Documents by Reference.............................. 3
Selling Stockholders......................................................... 4
Legal Opinion................................................................ 6
Experts...................................................................... 6
Index to Supplemental Consolidated Financial Statements.....................F-1
</TABLE>
No dealer, salesperson or other person has been authorized to give any
information or to make any representations not contained in this Prospectus or
incorporated by reference to this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The delivery of this Prospectus at any time
does not imply that the information contained herein is correct as of any time
subsequent to its date.
<PAGE>
THE COMPANY
General
Robotic Vision Systems, Inc. ("RVSI" or the "Company"), either through its
electronics division or through its wholly owned subsidiaries, Acuity Imaging,
Inc. ("Acuity"), International Data Matrix, Inc. ("I.D. Matrix"), Computer
Identics Corporation ("CI") and Systemation Engineered Products, Inc.
("Systemation"), designs, manufactures, markets and sells automated 2-
dimensional ("2-D") and 3-dimensional ("3-D") machine vision-based products and
systems for inspection, measurement and identification, and is a leader in
advanced electro-optical sensor technology. RVSI's aircraft safety division is
developing an ice detection product for the aviation industry.
The Company was incorporated in New York in 1976 and reincorporated in
Delaware in 1977. Its executive offices are located at 425 Rabro Drive East,
Hauppauge, New York 11788; telephone (516) 273-9700.
Recent Developments
On August 30, 1996, the Company consummated a merger with CI, a publicly
owned company located in Canton, Massachusetts, pursuant to which CI became a
wholly-owned subsidiary of RVSI ("CI Merger"). CI designs, manufactures, markets
and services standard barcode products, data collection networks, and systems
for the data collection and material handling/industrial markets. The CI Merger
was structured as a tax free reorganization and accounted for as a pooling of
interests. As a consequence of the CI Merger, RVSI issued approximately
2,127,000 shares of its Common Stock in exchange for all the outstanding shares
of CI Common Stock.
On October 1, 1996, the Company consummated a merger with Systemation, a
privately owned company located in New Berlin, Wisconsin, pursuant to which
Systemation became a wholly-owned subsidiary of RVSI ("Systemation Merger").
Systemation is widely recognized as a world leader in tape-and-reel, as well as
tube and tray based component processing systems for the semi-conductor and
electronics industries. The Systemation Merger was structured as a tax-free
reorganization and accounted for as a pooling of interests. As a consequence of
the Systemation Merger, the Company issued 1,740,000 shares of its Common Stock
to four of the Selling Stockholders in exchange for all of the outstanding
shares of Systemation common stock. See "Selling Stockholders."
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). In accordance therewith,
the Company files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Regional Offices of the Commission at 7 World
Trade Center, New York, New York 10048 and Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60621. Copies of such material may be obtained
from the Public Reference Section of the Commission at prescribed rates by
writing to the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, all reports filed by the Company via the Commission's Electronic Data
Gathering and Retrieval System (EDGAR) can be obtained from the Commission's
Internet website located at www.sec.gov.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement, copies of which can be obtained from the
Public Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, upon payment of the fees prescribed by the Commission.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated herein by reference are the following documents filed by the
Company with the Commission (File No. 0-8623) under the Exchange Act:
(a) The Company's Annual Report on Form 10-K, 10-K/A-1 and 10-K/A-2
for its fiscal year ended September 30, 1996 (the "Annual Report");
(b) The Company's Current Report on Form 8-K dated October 9, 1996
relating to the Systemation Merger;
(c) The Company's Current Report on Form 8-K/A-1 dated December 16,
1996 relating to the Systemation Merger;
(d) The Company's Current Report on Form 8-K/A-2 dated January 21,
1997 relating to the Systemation Merger; and
(e) The Company's Registration Statement on Form 8-A for a
description of the Common Stock.
All documents filed by the Company with the Commission pursuant to Sections
13, 14 and 15(d) of the Exchange Act subsequent hereto, but prior to the
termination of this offering, shall be deemed to be incorporated herein by
reference and to be a part hereof from their respective dates of filing.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents referred to above which have been
incorporated into this Prospectus by reference (other than the exhibits to such
documents). Requests or such copies should be directed to Robert H. Walker,
Secretary, Robotic Vision Systems, Inc., 425 Rabro Drive East, Hauppauge, New
York 11788; telephone number: (516) 273-9700.
3
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
Selling Stockholders, four of whom, other than General Motors Corporation
("GMC"), acquired their respective shares of RVSI Common Stock on October 1,
1996 pursuant to the terms of an Agreement and Plan of Merger and Reorganization
by which Systemation became a wholly owned subsidiary of RVSI. GMC acquired
994,275 shares of the Company's common stock pursuant to the terms of a Stock
and Warrant Purchase Agreement dated December 12, 1984 between GMC and the
Company (the "GMC Purchase Agreement") and an additional 231,500 shares of the
Company's common stock in 1988 pursuant to the exercise of common stock purchase
rights issued to all of the Company's then current stockholders. The three
remaining Selling Stockholders are the holders of common stock purchase warrants
acquired from the Company in consideration of consulting services performed on
the Company's behalf. The Selling Stockholders acquired their respective shares
of RVSI Common Stock absent registration under the Securities Act by reason of
the exemption from such registration afforded by the provisions of Section 4(2)
thereof. The Company will receive no proceeds from the sale of the shares by the
Selling Stockholders. The shares owned by the Selling Stockholders are included
in this Registration Statement pursuant to contractual commitments made to each
such persons by the Company.
<TABLE>
<CAPTION>
Beneficial
Beneficial Number of Shares Ownership
Ownership of of Shares of Percentage of
of Shares of Common Stock Common Common
Name of Selling Common Stock at Offered Stock After the Stock After the
Stockholder January 20, 1997 for Sale Offering Offering
- --------------- ---------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Phillip E. Koerper(1) 956,605 956,605 - -
Michael A. Nelesen(1) 313,358 313,358 - -
Merlin E. Behnke(1) 313,358 313,358 - -
Alvira M. Nemetz(1) 156,679 156,679 - -
General Motors 1,225,775 1,225,775(3) - -
Corporation(2)
Zuckert, Scoutt 12,000(4) 12,000(4) - -
& Rasenberger
Morgen, Evan & 134,128(6) 44,999(4) 89,129 -
Company Inc.(5)
Larry Ryan 1,600(4) 1,600(4) - -
International
- -------------------------
</TABLE>
(1) Prior to the Company's acquisition of Systemation, the named Selling
Stockholders each served as executive officers and directors of
Systemation and as of the date of this Prospectus continue to serve as
officers of Systemation.
(2) Under the terms of the GMC Purchase Agreement, GMC has the right, which it
has not exercised since 1990, to designate one
4
<PAGE>
person to serve as a director of the Company so long as GMC holds at least
five percent of the outstanding Common Stock of the Company. As a
consequence of such designation right, GMC may be deemed to be an
"affiliate" of the Company, as such term is defined in the Securities Act
and in the rules and regulations promulgated thereunder.
(3) The GMC Purchase Agreement affords the Company a 45 day right of first
refusal to purchase these shares if and when offered for sale by GMC. As of
the date of this Prospectus, the Company has not determined whether or not
it will exercise this right.
(4) Represents shares issuable upon exercise of outstanding common stock
purchase warrants.
(5) Mark Lerner, a director of the Company, is President and a principal
stockholder of Morgen, Evan & Company, Inc.
(6) Includes 126,128 shares issuable upon exercise of outstanding common stock
purchase warrants; also includes 8,000 shares issuable upon exercise of
outstanding options held by Mr. Lerner.
The Selling Stockholders, or their pledgees, donees, transferees or other
successors, may sell the Common Stock in any of three ways: (i) through broker-
dealers; (ii) through agents or (iii) directly to one or more purchasers. The
distribution of the Common Stock may be effected from time to time in one or
more transactions (which may involve crosses or block transactions) (A) in the
over-the-counter market, or (B) in transactions otherwise than in the over-the-
counter market. Any of such transactions may be effected at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, at negotiated prices or at fixed prices. The Selling Stockholders may
effect such transactions by selling the Common Stock to or through broker-
dealers, and such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the Selling Stockholders and/or
commissions from purchasers of the Common Stock for whom they may act as agent
(which discounts, concessions or commissions will not exceed those customary in
the types of transactions involved). The Selling Stockholders and any broker-
dealers or agents that participate in the distribution of the Common Stock might
be deemed to be underwriters, and any profit on the sale of the Common Stock by
them and any discounts, commissions or concessions received by any such broker-
dealers or agents might be deemed to be underwriting discounts and commissions
under the Securities Act.
5
<PAGE>
LEGAL OPINION
The legality of the Common Stock offered hereby will be passed upon for the
Company by Parker Duryee Rosoff & Haft A Professional Corporation, 529 Fifth
Avenue, New York, New York 10017. Jay M. Haft, of counsel to such Firm and a
director of the Company, beneficially owns 439,546 shares of Common Stock of the
Company (including 398,150 shares owned by Mr. Haft's spouse), as well as
options and warrants to acquire an additional 112,000 shares of such Common
Stock. Members of Parker Duryee Rosoff & Haft, other than Mr. Haft, beneficially
own shares of Common Stock of the Company (aggregating less than 1% of the
outstanding Common Stock).
EXPERTS
The financial statements of the Company and its consolidated subsidiaries
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended September 30, 1996 and the supplemental financial
statements of the Company and its consolidated subsidiaries included in this
Prospectus as of September 30, 1996 and 1995 and for each of the three years in
the period ended September 30, 1996, except Computer Identics Corporation and
subsidiaries for the years ended December 31, 1995 and 1994, and except Acuity
Imaging, Inc. and subsidiaries for the years ended September 30, 1995 and
December 31, 1994, have been audited by Deloitte & Touche LLP as stated in their
reports which are included in and incorporated by reference in the Registration
Statement. The financial statements of Computer Identics Corporation and
subsidiaries for the periods indicated above (consolidated with those of the
Company) have been audited by Ernst & Young LLP and the financial statements of
Acuity Imaging, Inc. and subsidiaries for the periods indicated above
(consolidated with those of the Company) have been audited by Arthur Andersen
LLP, as stated in their respective reports which are incorporated by reference
and included herein. Such financial statements and supplemental financial
statements of the Company and its consolidated subsidiaries are incorporated by
reference and included herein, respectively, in reliance upon the respective
reports of such firms given upon their authority as experts in accounting and
auditing. All of the foregoing firms are independent auditors.
The financial statements of Systemation Engineered Products, Inc. as of
March 31, 1996 and 1995 and for the years then ended incorporated in this
Prospectus by reference from the Company's Current Report on Form 8-K/A-1 and
Form 8-K/A-2 dated October 9, 1996 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is incorporated herein by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
6
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
- ---------------------------------------------
INDEX TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------------------------
Independent Auditors' Report of Deloitte & Touche LLP F-2 to F-3
Report of Arthur Andersen LLP, Independent Public Accountants F-4
Report of Ernst & Young LLP, Independent Auditors F-5
Supplemental Consolidated Balance Sheets
as of September 30, 1996 and 1995 F-6
Supplemental Consolidated Statements of Income
for the Years Ended September 30, 1996, 1995 and 1994 F-7
Supplemental Consolidated Statements of Stockholders' Equity
for the Years Ended September 30, 1996, 1995 and 1994 F-8
Supplemental Consolidated Statements of Cash Flows
for the Years Ended September 30, 1996, 1995 and 1994 F-9 to F-10
Notes to Supplemental Consolidated Financial Statements
for the Years Ended September 30, 1996, 1995 and 1994 F-11 to F-28
Supplemental Schedule II: Valuation and Qualifying
Accounts F-29
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Robotic Vision Systems, Inc. and subsidiaries:
We have audited the accompanying supplemental consolidated balance sheets of
Robotic Vision Systems, Inc. and subsidiaries (the "Company") as of September
30, 1996 and 1995, and the related supplemental consolidated statements of
income, stockholders' equity, and cash flows for each of the three years in the
period ended September 30, 1996. Our audits included the supplemental financial
statement schedule listed in the index on page F-1. These supplemental financial
statements and supplemental financial statement schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these supplemental financial statements and supplemental financial statement
schedule based on our audits. We did not audit the consolidated financial
statements of Acuity Imaging, Inc. and subsidiaries ("Acuity"), a wholly-owned
subsidiary, for the years ended September 30, 1995 and December 31, 1994,
respectively, which statements reflect total assets constituting 8% of
consolidated total assets as of September 30, 1995 and total revenues
constituting 16% and 24% of consolidated total revenues for the years ended
September 30, 1995 and 1994, respectively. We also did not audit the
consolidated financial statements of Computer Identics Corporation and
subsidiaries ("CI"), a wholly-owned subsidiary, for the years ended December 31,
1995 and 1994, respectively, which statements reflect total assets constituting
16% of consolidated total assets as of September 30, 1995 and total revenues
constituting 23% and 29% of consolidated total revenues for the years ended
September 30, 1995 and 1994, respectively. Those financial statements were
audited by other auditors whose reports have been furnished to us, and our
opinion, insofar as it relates to the amounts included for Acuity and CI as of
September 30, 1995 and for the years ended September 30, 1995 and 1994, is based
solely on the reports of such other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The supplemental consolidated financial statements give retroactive effect to
the merger of Robotic Vision Systems, Inc. and subsidiaries and Systemation
Engineered Products, Inc. and subsidiary as of October 1, 1996, which has been
accounted for as a pooling of interests as described in Note 2 to the
supplemental consolidated financial statements. Generally accepted accounting
principles proscribe giving retroactive effect to a consummated business
combination accounted for by the pooling of interests method in the financial
statements that do not cover the date of consummation. These supplemental
consolidated financial statements do not extend through the date of
consummation, however, they will become the historical consolidated financial
statements of the Company after financial statements covering the date of
consummation of the business combination are issued.
F-2
<PAGE>
In our opinion, based on our audits and the reports of the other auditors, such
supplemental consolidated financial statements present fairly, in all material
respects, the financial position of the Company at September 30, 1996 and 1995,
and the results of their operations and their cash flows for each of the three
years in the period ended September 30, 1996 in conformity with generally
accepted accounting principles after financial statements are issued for a
period which includes the date of consummation of the merger described above.
Also, in our opinion, such supplemental financial statement schedule, when
considered in relation to the basic supplemental consolidated financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
/s/ Deloitte & Touche LLP
Jericho, New York
December 9, 1996 (January 6, 1997 as to Note 12)
F-3
<PAGE>
ARTHUR ANDERSEN LLP
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Acuity Imaging, Inc.:
We have audited the consolidated balance sheet of Acuity Imaging, Inc.(a
Delaware corporation and a wholly owned subsidiary of Robotic Vision Systems,
Inc.) and subsidiaries as of September 30, 1995, and the related consolidated
statements of operations and cash flows for the years ended September 30, 1995
and December 31, 1994. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Acuity Imaging, Inc.
and subsidiaries at September 30, 1995, and the results of their operations and
their cash flows for the years ended September 30, 1995 and December 31, 1994 in
conformity with generally accepted accounting principles.
On September 20, 1995, Robotic Vision Systems, Inc. acquired Acuity Imaging,
Inc.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts
November 6, 1995
F-4
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Board of Directors
and Stockholders of Computer Identics Corporation:
We have audited the consolidated balance sheets of Computer Identics Corporation
and subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
two years in the period ended December 31, 1995 (not presented separately
herein). Our audits also included the related financial statements schedule -
Valuation and Qualifying Accounts, for each of the two years in the period ended
December 31, 1995 (not presented separately herein). These financial statements
and schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statements presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Computer Identics
Corporation and subsidiaries at December 31, 1995 and 1994, and the consolidated
results of their operations, and their cash flows for each of the two years in
the period ended December 31, 1995, in conformity with generally accepted
accounting principles. Also, in our opinion the related financial statements
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects the information set forth
therein.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 8, 1996
F-5
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
- ---------------------------------------------
SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND 1995
(in thousands, except share and per share amounts)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOTES 1996 1995
----- --------- ---------
Restated Restated
ASSETS (Note 2) (Note 2)
------
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 18,192 $ 18,266
Investments 1 1,500 1,000
Accounts receivable, net 3,9 27,338 24,076
Inventories 4 23,590 20,984
Deferred income taxes 5 8,116 3,271
Prepaid expenses and other 1,348 576
-------- --------
Total current assets 80,084 68,173
PLANT AND EQUIPMENT, net 6 9,266 6,459
INVESTMENTS 1 665 1,989
GOODWILL, net of accumulated amortization of $61 in 1996 2 2,627 -
OTHER ASSETS 5,7 4,343 2,085
-------- --------
$ 96,985 $ 78,706
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Notes payable 9 $ 7,159 $ 5,852
Current portion of long-term debt 10 1,066 428
Accounts payable 11,880 12,991
Accrued expenses and other current liabilities 8 12,332 11,302
Advance contract payments received 1,671 2,242
-------- --------
Total current liabilities 34,108 32,815
LONG-TERM DEBT 10 - 1,050
OTHER LIABILITIES 479 470
-------- --------
TOTAL LIABILITIES 34,587 34,335
-------- --------
COMMITMENTS AND CONTINGENCIES 12
STOCKHOLDERS' EQUITY: 13
Common stock, $.01 par value; shares authorized,
30,000,000; shares issued and outstanding, 1996 -
20,697,000 and 1995 - 19,038,000 207 190
Additional paid-in capital 143,264 134,536
Accumulated deficit (81,395) (90,503)
Deferred compensation - (60)
Unrealized gain on investments available for sale 1 147 -
Cumulative translation adjustment 175 208
-------- --------
Total stockholders' equity 62,398 44,371
-------- --------
$ 96,985 $ 78,706
======== ========
</TABLE>
See notes to supplemental consolidated financial statements.
F-6
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
- ---------------------------------------------
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
(in thousands, except per share amounts)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOTES 1996 1995 1994
----- --------- --------- ---------
Restated Restated Restated
(Note 2) (Note 2) (Note 2)
<S> <C> <C> <C> <C>
REVENUES 17 $143,540 $122,125 $90,994
COST OF REVENUES 74,669 59,891 45,594
-------- -------- -------
GROSS PROFIT 68,871 62,234 45,400
-------- -------- -------
OPERATING COSTS AND EXPENSES:
Research and development costs 18,405 15,751 11,465
Selling, general and administrative
expenses 39,603 34,257 28,552
Merger expenses 2 2,661 1,305 -
Separation costs 14 - - 469
Interest income (1,125) (518) (150)
Interest expense 733 536 426
-------- -------- -------
60,277 51,331 40,762
-------- -------- -------
INCOME BEFORE INCOME TAX BENEFIT
(PROVISION) 8,594 10,903 4,638
INCOME TAX BENEFIT (PROVISION) 5 1,132 92 (1)
-------- -------- -------
NET INCOME $ 9,726 $ 10,995 $ 4,637
======== ======== =======
NET INCOME PER SHARE $ 0.45 $ 0.55 $0.25
======== ======== =======
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 21,386 19,872 18,358
======== ======== =======
</TABLE>
See notes to supplemental consolidated financial statements.
F-7
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
- ---------------------------------------------
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
(in thousands)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common Stock Additional
----------------------
Number Paid-in Accumulated
Notes of Shares Amount Capital Deficit
---------- ---------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C>
Balance October 1, 1993 (as previously reported) 13,189 $133 $116,471 $(108,498)
Changes resulting from acquisition accounted
for as pooling of interests 2 1,740 17 (368) 2,464
------ ---- -------- -----------
Balance, October 1, 1993 (Restated) 14,929 150 116,103 (106,034)
Shares and warrants issued in connection with
private equity placement, net of offering costs 13 1,360 14 3,790 -
Shares issued in connection with private placement
of subsidiary, net of offering costs 13 59 - 491 -
Warrants issued for professional services 13 - - 38 -
Shares issued in connection with the exercise
of stock options and warrants 13 597 5 728 -
Other stock transactions 78 1 371 -
Translation adjustment - - - -
Net income - - - 4,637
------ ---- -------- -----------
Balance, September 30, 1994 (Restated) 17,023 170 121,521 (101,397)
Shares and warrants issued in connection with
private equity placement, net of offering costs 13 1,110 11 9,375 -
Shares issued in connection with private placement
of subsidiary, net of offering costs 13 119 2 1,763 -
Warrants issued for professional services 13 - - 92 -
Shares issued in connection with the exercise
of stock options and warrants 13 746 7 1,476 -
Other stock transactions 40 - 309 -
Change in year end of pooled companies 2 - - - (101)
Translation adjustment - - - -
Net income - - - 10,995
------ ---- -------- -----------
Balance, September 30, 1995 (Restated) 19,038 190 134,536 (90,503)
Shares issued in connection with the exercise of
stock options and warrants 13 1,511 15 5,821 -
Shares issued in connection with the acquisition
of Northeast Robotics, Inc. accounted for as
a purchase 2 139 1 2,675 -
Warrants issued for professional services 13 - - 74 -
Other stock transactions 9 1 158 -
Change in year end of pooled company 2 - - - (618)
Change in net unrealized holding gains 1 - - - -
Translation adjustment - - - -
Net income - - - 9,726
------ ---- -------- -----------
Balance, September 30, 1996 (Restated) 20,697 $207 $143,264 $ (81,395)
====== ==== ======== ===========
<CAPTION>
Unrealized Cumulative Total
Deferred Gain on Translation Stockholders'
Compensation Investments Adjustment Equity
------------ ----------- ----------- -------------
<S> <C> <C> <C> <C>
Balance October 1, 1993 (as previously reported) $(113) $ - $ 79 $ 8,072
Changes resulting from acquisition accounted
for as pooling of interests - - - 2,113
---------- ----------- ---- -------
Balance, October 1, 1993 (Restated) (113) - 79 10,185
Shares and warrants issued in connection with
private equity placement, net of offering costs - - - 3,804
Shares issued in connection with private placement
of subsidiary, net of offering costs - - - 491
Warrants issued for professional services - - - 38
Shares issued in connection with the exercise
of stock options and warrants - - - 733
Other stock transactions 59 - - 431
Translation adjustment - - 39 39
Net income - - - 4,637
---------- ----------- ---- -------
Balance, September 30, 1994 (Restated) (54) - 118 20,358
Shares and warrants issued in connection with
private equity placement, net of offering costs - - - 9,386
Shares issued in connection with private placement
of subsidiary, net of offering costs - - - 1,765
Warrants issued for professional services - - - 92
Shares issued in connection with the exercise
of stock options and warrants - - - 1,483
Other stock transactions (6) - - 303
Change in year end of pooled companies - - - (101)
Translation adjustment - - 90 90
Net income - - - 10,995
---------- ----------- ---- -------
Balance, September 30, 1995 (Restated) (60) - 208 44,371
Shares issued in connection with the exercise of
stock options and warrants - - - 5,836
Shares issued in connection with the acquisition
of Northeast Robotics, Inc. accounted for as
a purchase - - - 2,676
Warrants issued for professional services - - - 74
Other stock transactions 60 - - 219
Change in year end of pooled company - - - (618)
Change in net unrealized holding gains - 147 - 147
Translation adjustment - - (33) (33)
Net income - - - 9,726
---------- ----------- ---- -------
Balance, September 30, 1996 (Restated) $ - $ 147 $ 175 $62,398
========== =========== ====== =======
</TABLE>
See notes to supplemental consolidated financial statements.
F-8
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
- ---------------------------------------------
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
(in thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
Restated Restated Restated
(Note 2) (Note 2) (Note 2)
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 9,726 $10,995 $ 4,637
Adjustments to reconcile net income
to net cash provided by operating activities:
Deferred income taxes (2,881) (1,729) (626)
Depreciation and amortization 3,221 2,354 1,708
Provision for bad debts 882 113 117
Other 214 284 252
Changes in operating assets and liabilities (net of
effects of business acquired):
Accounts receivable (6,039) (7,401) (4,094)
Inventories (4,065) (8,922) (2,350)
Prepaid expenses and other current assets (792) (102) (34)
Other assets (2,853) (854) (441)
Accounts payable (444) 5,346 1,766
Accrued expenses and other current liabilities 3,705 3,407 (23)
Advance contract payments received (23) (350) (26)
Other liabilities (164) (136) (35)
------- ------- -------
Net cash provided by operating activities 487 3,005 851
------- ------- -------
INVESTING ACTIVITIES:
Proceeds from maturity of investments 1,000 1,500 -
Additions to plant and equipment (5,534) (3,540) (2,564)
Purchase of investments - (1,484) (2,984)
Payment for purchase of business (77) - -
------- ------- -------
Net cash used in investing activities (4,611) (3,524) (5,548)
------- ------- -------
FINANCING ACTIVITIES:
Proceeds from the issuance of common stock and warrants - private
equity placements (less offering costs) - 10,306 4,068
Proceeds from the exercise of stock options and warrants 2,428 1,357 733
Net proceeds from short-term borrowings 7,752 6,400 2,370
Repayment of long-term borrowings (5,870) (1,940) (4,185)
------- ------- -------
Net cash provided by financing activities 4,310 16,123 2,986
------- ------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 71 44 20
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 257 15,648 (1,691)
CASH AND CASH EQUIVALENTS:
Beginning of year 17,935 2,618 4,623
------- ------- -------
End of year $18,192 $18,266 $ 2,932
======= ======= =======
</TABLE>
See notes to supplemental consolidated financial statements.
F-9
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
- ---------------------------------------------
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994 (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995 1994
--------- --------- ---------
Restated Restated Restated
(Note 2) (Note 2) (Note 2)
<S> <C> <C> <C>
SUPPLEMENTAL INFORMATION:
Interest paid $ 699 $ 554 $ 1,564
-------- -------- --------
Taxes paid $ 1,415 $ 1,056 $ 797
-------- -------- --------
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock to acquire
Northeast Robotics, Inc. $ 2,676 $ - $ -
-------- -------- --------
Income tax benefit relating to the
exercise of stock options $ 3,408 $ 126 $ -
-------- -------- --------
Property and equipment acquired under
capital leases $ - $ 354 $ 193
-------- -------- --------
Liabilities satisfied by private offering
of common stock of subsidiary $ - $ 845 $ 227
-------- -------- --------
</TABLE>
See notes to supplemental consolidated financial statements.
F-10
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
- ---------------------------------------------
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
- -----------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL REPORTING POLICIES
a. Description of Business - Robotic Vision Systems, Inc. and subsidiaries
-----------------------
(the "Company") designs, manufactures, markets and sells automated two
dimensional and three dimensional machine vision based products and
systems for inspection, measurement and identification, and is a leader in
advanced electro-optical sensor technology. The Company is also
developing an ice detection product for the aviation industry.
b. Principles of Consolidation - The supplemental consolidated financial
---------------------------
statements include the financial statements of Robotic Vision Systems,
Inc. and its subsidiaries, all of which are wholly-owned. All significant
intercompany transactions and balances have been eliminated in
consolidation.
The supplemental consolidated financial statements of the Company have
been prepared to give retroactive effect to the business combination with
Systemation Engineered Products, Inc. ("SEP") (Note 2) which occurred on
October 1, 1996 and has been accounted for as a pooling of interests.
Generally accepted accounting principles proscribe giving retroactive
effect to a consummated business combination accounted for by the pooling
of interests method in the financial statements that do not cover the date
of consummation. These supplemental consolidated financial statements do
not extend through the date of consummation,however, they will become the
historical consolidated financial statements of the Company after
financial statements covering the date of consummation of the business
combination are issued.
c. Revenues and Cost of Revenues - The Company recognizes revenue on its
-----------------------------
standard electronic inspection and measurement products upon shipment.
Revenue from the licensing of software is recognized when the software is
delivered if collectibility is probable and there are no significant
vendor obligations. Engineering service and support revenue is recognized
when such services are rendered. Warranty costs associated with products
sold with warranty protection, as well as other post-contract support
obligations, are estimated based on the Company's historical experience
and recorded in the period the product is sold.
d. Cash and Cash Equivalents - Cash and cash equivalents includes money
-------------------------
market accounts and certain debt securities issued by the United States
government with an original maturity of three months or less.
e. Investments - Investments consist primarily of certain debt securities
-----------
issued by the United States government with maturities through November
1997. The Company's intention is to hold such investments until their
maturity, therefore, such investments are recorded at their amortized cost
which was $1,998,000 and $2,989,000 at September 30, 1996 and 1995,
respectively. The carrying value of these investments approximated market
value. In addition, at September 30, 1996, the Company had marketable
equity securities classified as available-for-sale which were recorded at
their fair market value of $167,000, with unrealized gains of $147,000
included as a separate component of stockholders' equity.
F-11
<PAGE>
f. Inventories - Inventories are stated at the lower of cost (using the
-----------
first-in, first-out cost flow assumption) or market.
g. Plant and Equipment - Plant and equipment is recorded at cost less
-------------------
accumulated depreciation and amortization and includes the costs
associated with demonstration equipment and other equipment internally
developed by the Company. The cost of internally developed assets
includes direct material and labor costs and applicable factory overhead.
Depreciation is computed by the straight-line method over estimated lives
ranging from two to eight years. Leasehold improvements are amortized
over the lesser of their respective estimated useful lives or lease terms.
h. Impairment of Long-Lived Assets - In March 1995, the Financial Accounting
-------------------------------
Standards Board issued Statements of Financial Accounting Standards
("SFAS") No. 121, "Accounting For the Impairment of Long-Lived Assets and
For Long-Lived Assets To Be Disposed Of". SFAS No. 121 establishes
accounting standards for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be held
and used, and for long-lived assets and certain identifiable intangibles
to be disposed of.
In accordance with SFAS No. 121, the Company reviews its long-lived
assets, including property and equipment, goodwill and other identifiable
intangibles for impairment whenever events or changes in circumstances
indicate that the carrying amount of the assets may not be fully
recoverable. To determine recoverability of its long-lived assets, the
Company evaluates the probability that future undiscounted net cash flows,
without interest charges, will be less than the carrying amount of the
assets. Impairment is measured at fair value. The adoption of SFAS No. 121
had no effect on the Company's consolidated financial statements.
i. Software Development Costs - Software development costs are capitalized
--------------------------
in accordance with SFAS No. 86. Capitalized software development costs
are amortized primarily over a five-year period, which is the estimated
useful life of the software. Amortization begins in the period in which
the related product is available for general release to customers.
j. Research and Development Costs - The Company charges research and
------------------------------
development costs for Company-funded projects to operations as incurred.
Research and development costs which are reimbursable under customer-
funded contracts are treated as contract costs.
k. Income Taxes - The Company accounts for income taxes under the
------------
provisions of SFAS No. 109, "Accounting for Income Taxes," which requires
recognition of deferred tax assets and liabilities for the expected future
tax consequences of events that have been included in the Company's
consolidated financial statements or tax returns. Under this method,
deferred tax assets and liabilities are determined based on the
differences between the financial accounting and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
The cumulative amount of undistributed earnings of foreign subsidiaries at
September 30, 1996 was approximately $359,000. The Company does not
provide deferred taxes on undistributed earnings of foreign subsidiaries
since the Company anticipates no significant incremental U.S. income taxes
on the repatriation of these earnings as tax rates in foreign
jurisdictions generally approximate or exceed the U.S. Federal rate.
F-12
<PAGE>
l. Foreign Currency Translation - Assets and liabilities of the Company's
----------------------------
European subsidiaries are translated at the exchange rate in effect at the
balance sheet date. Income statement accounts are translated at the
average exchange rate for the year. The resulting translation adjustments
are excluded from operations and accumulated as a separate component of
stockholders' equity. Transaction gains (losses) are included in net
income and totaled $(52,000), $167,000 and $(72,000) in 1996, 1995 and
1994, respectively.
m. Accounting for Stock-Based Compensation - In October 1995, the Financial
---------------------------------------
Accounting Standards Board issued SFAS No. 123, "Accounting for Stock-
Based Compensation," which must be adopted by the Company in fiscal 1997.
The Company has chosen not to implement the fair value based accounting
method for employee stock options, but has elected to disclose, commencing
with its fiscal 1997 consolidated financial statements, pro forma net
income and earnings per share as if such method had been used to account
for stock-based compensation cost as described in SFAS No. 123.
n. Income Per Share - Net income per common share is computed by dividing
----------------
each year's net income by the respective weighted average number of shares
of common stock outstanding during the period, after giving effect to
dilutive options and warrants. The effect of options and warrants was
calculated using the modified treasury stock method for the year ended
September 30, 1994.
o. Fair Value of Financial Instruments - The following methods and
-----------------------------------
assumptions were used to estimate the fair value of each class of
financial instruments:
a) Cash and Cash Equivalents - The carrying amounts approximate fair
-------------------------
value because of the short maturity of these instruments.
b) Investments - The carrying amounts approximate fair value as
-----------
determined by quoted market prices.
c) Receivables - The carrying amount approximates fair value because of
-----------
the short maturity of these instruments.
d) Debt - The carrying amounts approximate fair value based on borrowing
----
rates currently available to the Company for loans with similar terms.
p. Use of Estimates - The preparation of financial statements in conformity
----------------
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
q. Reclassifications - Certain amounts in the 1994 and 1995 financial
-----------------
statements have been reclassified to conform with the 1996 presentation.
F-13
<PAGE>
2. ACQUISITIONS
a. Systemation Engineered Products, Inc.
-------------------------------------
On October 1, 1996, the Company acquired the outstanding shares of SEP
for 1,740,000 shares of the Company's common stock, having a market
value at the date of the merger of approximately $22,838,000. SEP
designs manufactures, markets and sells specialized high speed
production machinery for the electronics component industry. SEP's
principle product lines include tape and reel packaging equipment and
automatic optical inspection systems. This acquisition has been
accounted for as a pooling of interests and, accordingly, the
supplemental consolidated financial statements have been restated to
include the accounts of SEP for all periods presented. The accompanying
September 30, 1995 and 1994 supplemental consolidated financial
statements include SEP's amounts for the years ended March 31, 1996 and
1995. The accompanying supplemental consolidated financial statements
for the year ended September 30, 1996 include the operations of SEP on
a common fiscal year. SEP's net income for the period October 1, 1995
through March 31, 1996 of $558,000, included twice in the accompanying
supplemental consolidated statements of income for the fiscal years
ended September 30, 1996 and 1995 as a result of conforming fiscal
years, has been included as an adjustment to consolidated accumulated
deficit. Expenses of $860,000 have been incurred related to this
merger.
The following is a reconciliation of certain restated amounts with
amounts previously reported:
<TABLE>
<CAPTION>
(in thousands)
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Revenues:
As previously reported $111,022 $ 93,005 $73,865
Effect of SEP pooling of interests 32,518 29,120 17,129
-------- -------- -------
As restated $143,540 $122,125 $90,994
======== ======== =======
Net income (loss):
As previously reported $ 11,998 $ 9,516 $ 3,171
Effect of SEP pooling of interests (2,272) 1,479 1,466
-------- -------- -------
As restated $ 9,726 $ 10,995 $ 4,637
======== ======== =======
Net income (loss) per share:
As previously reported $ 0.60 $ 0.52 $ 0.19
Effect of SEP pooling of interests (0.15) 0.03 0.06
-------- -------- -------
As restated $ 0.45 $ 0.55 $ 0.25
======== ======== =======
</TABLE>
b. Computer Identics Corporation
-----------------------------
On August 30, 1996, the Company acquired the outstanding shares of
Computer Identics Corporation ("CI") for approximately 2,127,000 shares
of the Company's common stock, having a market value at the date of the
merger of approximately $30,580,000. Outstanding
F-14
<PAGE>
CI stock options were converted into options to purchase approximately
186,000 shares of the Company's common stock. Outstanding CI warrants were
converted into warrants to purchase approximately 39,000 shares of the
Company's common stock. CI designs, manufactures, markets and sells
standard barcode products, data collection networks and systems for data
collection and material handling/industrial markets. This acquisition has
been accounted for as a pooling of interests and accordingly, the
consolidated financial statements have been restated to include the
accounts of CI for all periods presented. The accompanying September 30,
1995 and 1994 consolidated financial statements include CI's amounts for
the years ended December 31, 1995 and 1994. The accompanying consolidated
financial statements for the year ended September 30, 1996 include the
operations of CI on a common fiscal year. CI's net income for the period
October 1, 1995 through December 31, 1995 of $60,000 included twice in the
accompanying consolidated statements of income for the fiscal years ended
September 30, 1996 and 1995 as a result of conforming fiscal years, has
been included as an adjustment to consolidated accumulated deficit.
Included in the operating results of the Company for the year ended
September 30, 1996 are approximately $24,661,000 of revenues and
approximately $793,000 of net loss of CI prior to the date of acquisition
(August 30, 1996). Expenses of $1,547,000 have been incurred related to
this merger.
c. Northeast Robotics, Inc.
------------------------
On May 30, 1996, the Company consummated a merger with Northeast Robotics,
Inc. ("NER"), a privately owned company located in New Boston, New
Hampshire, pursuant to which NER became a wholly owned subsidiary of the
Company (the "NER Merger"). NER markets a line of patented illumination
products to perform reliably in difficult imaging applications involving
highly reflective or uneven surfaces. As a consequent of the NER Merger,
the Company issued approximately 139,000 shares of its common stock (which
had a market value of approximately $2,676,000 on the date the NER Merger
was consummated) to the shareholders of NER in exchange for all of the
outstanding shares of NER common stock.
This acquisition has been accounted for as a purchase and, accordingly,
the results of NER are included in the consolidated statements of income
of the Company since the date of acquisition and the purchase price
(including acquisition costs) has been allocated to net assets acquired
based upon their fair values. Goodwill relating to the acquisition of
$2,688,000 is being amortized over 15 years. Pro forma results of
operations assuming NER was acquired as of the beginning of each of the
fiscal years ended September 30, 1996 and 1995 would not differ
materiality from the reported results.
d. International Data Matrix, Inc.
-------------------------------
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 manufacturer and supplier of
two dimensional bar code reading systems. This acquisition has been
accounted for as a pooling of interests and accordingly, the consolidated
financial statements have been restated to include the accounts of IDM for
all periods presented. The
F-15
<PAGE>
accompanying September 30, 1994 consolidated financial statements include
IDM's amounts for the year ended December 31, 1994. The accompanying
consolidated financial statements for the years ended September 30, 1995
and 1996 include the operations of IDM on a common fiscal year. IDM's net
loss for the period October 1, 1994 through December 31, 1994 of $154,000,
included twice in the accompanying consolidated statements of income for
the fiscal years ended September 30, 1995 and 1994 as a result of
conforming fiscal years, has been included as an adjustment to the
consolidated accumulated deficit. Included in the operating results of the
Company for the years ended September 30, 1996 are approximately $77,000
of revenues and $135,000 of net loss of IDM prior to the date of
acquisition (October 23, 1995). Expenses of $445,000 have been incurred
related to this merger.
e. Acuity Imaging, Inc. and Subsidiaries
-------------------------------------
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 designs, manufactures and markets two
dimensional machine vision systems for use in industrial automation.
Outstanding Acuity stock options were converted into options to purchase
approximately 114,000 shares of the Company's common stock. This
acquisition has been accounted for as a pooling of interests. The
accompanying September 30, 1994 consolidated financial statements include
Acuity's amounts for the years ended December 31, 1994. The accompanying
consolidated financial statements for the years ended September 30, 1995
and 1996 include the operations of Acuity on a common fiscal year.
Acuity's net income for the period October 1, 1994 through December 31,
1994 of $255,000, included twice in the accompanying consolidated
statements of income for the fiscal years ended September 30, 1995 and
1994 as a result of conforming fiscal years, has been included as an
adjustment to the consolidated accumulated deficit. Included in the
operating results of the Company for the year ended September 30, 1995 are
approximately $19,153,000 of revenues and $1,188,000 of net loss of Acuity
prior to the date of acquisition (September 20, 1995). Expenses of
$1,160,000 have been incurred related to this merger.
f. Merger of Acuity (formerly Automatix Incorporated) with Itran Corp.
-------------------------------------------------------------------
On January 26, 1994, Acuity (formerly Automatix Incorporated
["Automatix"]) merged with Itran Corp. ("Itran") in a tax-free exchange of
approximately 1,483,000 registered shares of Automatix common stock for
substantially all of Itran's outstanding common and preferred stock. Itran
was a developer and seller of computerized visual inspection equipment.
Automatix was the surviving corporation and, simultaneously with the
merger, changed its name to Acuity Imaging, Inc. Outstanding Itran stock
options were converted into options to purchase approximately 162,000
shares of Acuity's common stock. The merger has been accounted for as a
pooling of interests. Expenses of approximately $1,091,000 were incurred
related to this merger.
F-16
<PAGE>
3. ACCOUNTS RECEIVABLE
Accounts receivable at September 30, 1996 and 1995 consisted of the
following:
<TABLE>
<CAPTION>
(in thousands)
1996 1995
------- -------
<S> <C> <C>
Billed accounts receivable $26,432 $23,297
Unbilled accounts receivable 2,206 1,298
------- -------
Total 28,638 24,595
Less allowance for doubtful accounts receivable 1,300 519
------- -------
Accounts receivables, net $27,338 $24,076
======= =======
</TABLE>
Unbilled receivables primarily relate to sales recorded on standard products
which have been shipped, but have not yet been finally accepted by the
customer. The Company has no significant remaining obligations relating to
these unbilled receivables and collectibility is probable. The Company
estimates that all of its unbilled receivables at September 30, 1996 will
become billable during the ensuing twelve months.
4. INVENTORIES
Inventories at September 30, 1996 and 1995 consisted of the following:
<TABLE>
<CAPTION>
(in thousands)
1996 1995
------- -------
<S> <C> <C>
Raw materials $ 9,995 $ 7,075
Work-in-process 10,920 11,861
Finished goods 2,675 2,048
------- -------
Total $23,590 $20,984
======= =======
</TABLE>
5. INCOME TAXES
The components of income before income tax benefit (provision) are as
follows:
<TABLE>
<CAPTION>
(in thousands)
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Domestic $8,795 $10,838 $4,739
Foreign (201) 65 (101)
------ ------- ------
Total $8,594 $10,903 $4,638
====== ======= ======
</TABLE>
F-17
<PAGE>
The income tax provision (benefit) for the fiscal years ended September 30,
1996, 1995 and 1994 consisted of the following:
<TABLE>
<CAPTION>
(in thousands)
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Current:
Federal $ 4,297 $ 4,957 $ 1,620
State 1,028 747 322
Foreign 38 42 38
Utilization of net operating loss carryforwards (3,614) (4,109) (1,353)
------- ------- -------
1,749 1,637 627
------- ------- -------
Deferred:
Federal (734) 674 306
State 83 222 66
Adjustment of valuation allowance (2,230) (2,625) (998)
------- ------- -------
(2,881) (1,729) (626)
------- ------- -------
Total $(1,132) $ (92) $ 1
======= ======= =======
</TABLE>
The adjustments of the valuation allowance during fiscal 1996, 1995 and 1994
emanate from the Company's profitable operations during those years and the
extent to which the Company can substantiate projected future earnings. The
valuation allowance as of September 30, 1996 relates primarily to net operating
loss carryforwards and tax credit carryforwards of Acuity, IDM and CI which are
subject to annual limitations as a result of the changes in ownership.
The income tax benefits related to the exercise of stock options reduces taxes
currently payable or increases net deferred tax assets, and is credited to
additional paid-in capital. Such amounts approximate $3,408,000 and $126,000
during the fiscal years ended September 30, 1996 and 1995, respectively.
A reconciliation between the statutory U.S. Federal income tax rate and the
Company's effective tax rate for the years ended September 30, 1996, 1995 and
1994 is as follows:
<TABLE>
<CAPTION>
1996 1995 1994
------- ------ -----
<S> <C> <C> <C>
U.S. Federal statutory rate 34.0% 34.0% 34.0%
Increases (reductions) due to:
State taxes - net of Federal tax benefit 8.3 4.7 5.2
Utilization of net operating loss carryforwards (42.1) (35.2) (28.4)
Anticipated future utilization of net operating
loss carryforwards (17.0) (11.1) (12.5)
Net operating loss not producing current tax
benefits 1.3 7.1 6.2
Other - net 2.3 (0.3) (4.5)
------ ----- -----
Total (13.2)% (0.8)% - %
====== ===== =====
</TABLE>
F-18
<PAGE>
The net deferred tax asset at September 30, 1996, 1995 and 1994 is comprised of
the following:
<TABLE>
<CAPTION>
(in thousands)
Deferred Tax Assets (Liabilities) 1996 1995 1994
- --------------------------------- --------- --------- ---------
<S> <C> <C> <C>
Net operating loss carryforwards $ 12,436 $ 13,334 $ 15,855
Tax credit carryforwards 2,853 2,651 1,927
Accrued liabilities 1,479 1,489 1,087
Inventories 2,492 1,206 767
Receivables 446 173 184
Property and equipment (292) (44) 173
Merger expenses 706 288 -
Software development costs (543) - -
-------- -------- --------
19,577 19,097 19,993
Less valuation allowance (11,422) (15,874) (18,499)
-------- -------- --------
Total $ 8,155 $ 3,223 $ 1,494
======== ======== ========
</TABLE>
At September 30, 1996, other assets include noncurrent net deferred tax assets
of $39,000. At September 30, 1995, other liabilities include noncurrent net
deferred tax liabilities of $48,000.
As of September 30, 1996, Robotic Vision Systems, Inc. ("RVSI") had Federal net
operating loss carryforwards of approximately $5,700,000. Such loss
carryforwards expire in the fiscal years 2005 through 2007. Additionally, RVSI
had Federal income tax credits of approximately $1,085,000 and state income tax
credits of approximately $774,000. The utilization of the carryforwards to
offset future tax liabilities is dependent upon the Company's ability to
generate sufficient taxable income during the carryforward periods.
As of September 30, 1996, CI had Federal net operating loss carryforwards of
approximately $5,223,000 which expire in the fiscal year 2001 through 2011, and
approximately $4,663,000 of net operating loss carryforwards attributable to its
foreign operations which can be carried forward indefinitely. Additionally, CI
had Federal income tax credits of approximately $665,000 and state income
credits of approximately $229,000. Because of the changes in ownership, as
defined in the Internal Revenue Code, which occurred in August 1996 (Note 2),
certain of the net operating loss carryforwards and credits are subject to
annual limitations.
As of September 30, 1996, IDM had Federal net operating loss carryforwards of
approximately $5,470,000. Such loss carryforwards expire in the fiscal years
2006 through 2011. In addition, IDM had available approximately $37,000 of
unused general business tax credits. Because of the changes in ownership, as
defined in the Internal Revenue Code, which occurred in October 1995 (Note 2),
certain of the net operating loss carryforwards and credits are subject to
annual limitations.
As of September 30, 1996, Acuity had Federal net operating loss carryforwards of
approximately $11,355,000. Such loss carryforwards expire in the fiscal years
1997 through 2010. In addition, Acuity had available approximately $325,000 of
unused investment tax credits. Because of the changes in ownership, as defined
in the Internal Revenue Code, which occurred in January 1994 and September 1995
(Note 2), certain of the net operating loss carryforwards and credits are
subject to annual limitations.
F-19
<PAGE>
6. PLANT AND EQUIPMENT
Plant and equipment at September 30, 1996 and 1995 consisted of the
following:
<TABLE>
<CAPTION>
(in thousands)
1996 1995
---- ----
<S> <C> <C>
Machinery and equipment $ 5,439 $ 6,049
Furniture, fixtures and other equipment 5,645 4,284
Demonstration equipment 4,874 3,256
Leasehold improvements 1,185 694
------- -------
Total 17,143 14,283
Less accumulated depreciation and amortization 7,877 7,824
------- -------
Plant and equipment - net $ 9,266 $ 6,459
======= =======
</TABLE>
7. OTHER ASSETS
Other assets at September 30, 1996 and 1995 consisted of the following:
<TABLE>
<CAPTION>
(in thousands)
1996 1995
---- ----
<S> <C> <C>
Software development costs, net of accumulated
amortization of $1,289,000 and $738,000,
respectively $3,353 $1,274
Other 990 811
------ ------
Total $4,343 $2,085
====== ======
</TABLE>
Certain software development costs totaling $2,630,000 and $535,000 have
been capitalized during the fiscal years ended September 30, 1996 and 1995,
respectively. Capitalized software development costs for the fiscal year
ended September 30, 1996 include $1,534,000 of costs related to certain
acquired subsidiaries. These subsidiaries had not capitalized any software
development costs in prior years because, prior to their respective
acquisitions by the Company, they had not utilized detailed program designs
in the software development process. In general, the software development
costs incurred by these subsidiaries between the time working models were
available and the related software projects were released to customers were
not material.
Amortization expense relating to software development costs for 1996, 1995
and 1994 was $551,000, $325,000 and $239,000, respectively.
8. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities at September 30, 1996 and
1995 consisted of the following:
<TABLE>
<CAPTION>
(in thousands)
1996 1995
---- ----
<S> <C> <C>
Accrued wages and related employee benefits $ 4,408 $ 4,529
Accrued sales commissions 3,742 2,607
Accrued warranty and other product related costs 1,730 1,038
Other 2,452 3,128
------- -------
Total $12,332 $11,302
======= =======
</TABLE>
F-20
<PAGE>
9. NOTES 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. There were no borrowings outstanding under
this agreement at September 30, 1996 and 1995.
SEP had a line of credit with a domestic bank which provided for maximum
borrowings of $3,250,000. Borrowings under this line of credit bore interest
at the prime rate (8.25 percent as of September 30, 1996) plus 0.75 percent
for the first $1,500,000 of the loan balance and increasing to the prime rate
plus 1.0 percent on the balance above $1,500,000. Borrowings under this line
of credit were payable on demand. The line of credit was secured by
substantially all of the assets of SEP which were approximately $16,941,000
at September 30, 1996. There was $3,250,000 outstanding under this line of
credit at September 30, 1996 and 1995. The entire balance outstanding under
this line of credit was paid in full in October 1996.
SEP had a second line of credit with a domestic bank which provided for
maximum borrowings of $4,500,000. Borrowings under this line of credit bore
interest at 1.5 percent over the prime rate. This agreement expired in
September 1996. The line of credit was secured by substantially all of the
assets of SEP. There was $3,150,000 and $215,000 outstanding under this
facility at September 30, 1996 and 1995, respectively. The entire balance
outstanding under this line of credit was paid in full in October 1996.
CI has an uncommitted line of credit with a domestic bank which provides for
maximum borrowings of DM 1,500,000. Borrowings under this line of credit
bear interest at the prevailing Lombard Rate plus 2.0 percent and are payable
on demand. There was DM 1,139,000 (approximately $759,000) outstanding under
this facility at September 30, 1996. There were no amounts outstanding under
this facility at September 30, 1995.
CI has an unsecured line of credit with a domestic bank which provides for
maximum borrowings of $1,000,000. Borrowings under this line of credit bear
interest at the prime rate plus 0.5 percent and are payable on demand. There
were no amounts outstanding under this facility at September 30, 1996. There
was $1,002,000 outstanding under this facility at September 30, 1995
At September 30, 1995, Acuity had a 90 day note payable to a domestic bank
due December 28, 1995. The note was guaranteed by RVSI and was
collateralized by certain investments and cash equivalents of RVSI. The note
bore interest at 8.25 percent. There was $1,385,000 outstanding on this note
at September 30, 1995.
F-21
<PAGE>
10. LONG-TERM DEBT
Long-term debt at September 30, 1996 and 1995 consisted of the following:
<TABLE>
<CAPTION>
(in thousands)
1996 1995
---- ----
<S> <C> <C>
SEP had an installment note payable with a bank due in
monthly installments of $25,000 including interest at the
prime rate plus 1.25 percent. A balloon payment of the unpaid
principle and interest was due in December 1996. The note
was secured by substantially all of the assets of SEP.
The entire balance outstanding under this note was paid in
full in October 1996. 845 933
Other borrowings 221 545
------ ------
Total long-term debt 1,066 1,478
Less current portion of long-term debt 1,066 428
------ ------
Long-term debt, net of current portion $ - $1,050
====== ======
</TABLE>
11. EMPLOYEE BENEFIT PLANS
Defined Benefit Plan - The Company has a noncontributory pension plan for
--------------------
employees who meet certain minimum eligibility requirements. The level of
retirement benefit is based on a formula which considers both employee
compensation and length of credited service.
Plan assets are invested in pooled bank investment accounts, and the fair
value of such assets is based on the quoted market prices of underlying
securities in such accounts. The Company funds pension plan costs based on
minimum and maximum funding criteria as determined by independent actuarial
consultants.
The components of net pension cost for the fiscal years ended September 30,
1996, 1995 and 1994 are summarized as follows:
<TABLE>
<CAPTION>
(in thousands)
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Service cost - benefits earned during the period $ 219 $ 158 $ 143
Interest on projected benefit obligations 97 83 62
Estimated return on plan assets (81) (56) (52)
Other - amortization of actuarial gains and
net transition asset (23) (20) (30)
----- ----- -----
Net pension cost $ 212 $ 165 $ 123
===== ===== =====
</TABLE>
The funded status of the plan compared with the accrued expense included in
the Company's consolidated balance sheet at September 30, 1996 and 1995 is
as follows:
F-22
<PAGE>
<TABLE>
<CAPTION>
(in thousands)
1996 1995
------- -------
<S> <C> <C>
Fair value of plan assets $1,211 $ 810
------ ------
Actuarial present value of benefit obligation:
Accumulated benefit obligation, including vested benefits
of $965,000 and $754,000 in 1996 and 1995, respectively 1,246 933
Effect of projected compensation increases 350 340
------ ------
Projected benefit obligation for services rendered to date 1,596 1,273
------ ------
Projected benefit obligation in excess of plan assets (385) (463)
Unrecognized net loss 210 217
Remaining unrecognized net transition asset being
amortized over 11 years (50) (86)
Unrecognized prior service costs 28 34
------ ------
Accrued pension cost $ (197) $ (298)
====== ======
</TABLE>
Significant assumptions used in determining net periodic pension cost and
related pension obligations are as follows:
<TABLE>
<CAPTION>
1996 1995
----- -----
<S> <C> <C>
Discount rate 7.50% 8.00%
Rate of compensation increase 4.00% 4.00%
Expected long-term rate of return on assets 8.25% 8.25%
</TABLE>
Defined Contribution Plans - The Company has four defined contribution
--------------------------
plans (the "Plans") for all eligible employees, as defined by the Plans. The
Company made matching employer contributions at various percentages in
accordance with the respective plan documents. The Company incurred
$242,000, $183,000 and $163,000 for matching employer contributions to the
Plans in 1996, 1995 and 1994, respectively. In 1996, 1995 and 1994, the
Company issued 4,000, 12,000 and 9,000 shares, respectively, of its common
stock to one of the Plans related to its prior year contribution.
12. COMMITMENTS AND CONTINGENCIES
Operating Leases - The Company has entered into operating lease agreements
----------------
for equipment, and manufacturing and office facilities. The minimum
noncancelable scheduled rentals under these agreements are as follows (in
thousands of dollars):
<TABLE>
<CAPTION>
Year Ending September 30: Facilities Equipment Total
--------------------------- ---------- --------- --------
<S> <C> <C> <C>
1997 $ 2,087 $297 $ 2,384
1998 1,911 162 2,073
1999 1,514 71 1,585
2000 1,349 19 1,368
2001 992 3 995
Thereafter 2,772 1 2,773
------- ---- -------
Total $10,625 $553 $11,178
======= ==== =======
</TABLE>
Rent expense for 1996, 1995 and 1994 was $1,910,000, $1,698,000 and
$1,626,000, respectively.
F-23
<PAGE>
On January 6, 1997, the lessor of SEP's manufacturing facility assigned the
lease to the former majority shareholder of SEP, in conjunction with the
sale of this facility to the former majority shareholder. In addition, the
lease was amended to include certain capital equipment owned by the former
majority shareholder. SEP began leasing this facility during fiscal 1996.
The base annual rental payable under the lease is $605,000. The lease
expires in October 2011.
Litigation - During fiscal 1992, the Company instituted an action
----------
against Cybo Systems, Inc. ("Cybo"), alleging that Cybo breached certain
agreements between the parties with respect to the sale by the Company to
Cybo of all of the assets of its welding and cutting systems business.
In response to the action brought by the Company, Cybo asserted claims
against the Company alleging, among other things, breach of contract and
warranties, fraud, bad faith, trespass and conversion. Cybo is seeking
aggregate damages in excess of $10,000,000. The Company believes that Cybo's
claims are without merit and plans to defend against them vigorously. The
Company's management, after discussion with legal counsel, believes that the
ultimate outcome of this matter will not have a material adverse impact on
the Company's consolidated financial statements.
The Company is also presently involved in other litigation matters in the
normal course of business. Based upon discussion with Company legal counsel,
management does not expect that these matters will have a material adverse
impact on the Company's consolidated financial statements.
13. STOCKHOLDERS' EQUITY
Private Equity Placements - During fiscal 1995, the Company entered into
-------------------------
an agreement with a group of investors. Under the agreement, the Company
received approximately $9,386,000, after expenses, in exchange for the
issuance of 1,110,000 shares of the Company's common stock. The Company
also issued warrants exercisable through June 2000 to purchase
approximately 68,000 shares of the Company's common stock at exercise
prices ranging from $8.75 to $9.00 per share.
During fiscal 1995, IDM entered into an agreement with a group of investors
and certain then existing stockholders. Under the agreement, IDM received
approximately $1,765,000 after expenses, in exchange for 46,447 shares of
IDM's common stock (approximately 119,000 equivalent shares of RVSI common
stock). IDM used approximately $785,000 of the net proceeds to satisfy
certain notes payable and related accrued interest and $60,000 of the net
proceeds to satisfy certain accounts payable.
During fiscal 1994, the Company entered into an agreement with a group of
investors. Under the agreement the Company received approximately
$3,804,000, after expenses, in exchange for the issuance of 1,360,000 shares
of the Company's common stock. The Company also issued warrants exercisable
through December 1999 to purchase 51,000 shares of the Company's common
stock at an exercise price of $3.75 per share.
During fiscal 1994, IDM entered into an agreement with an investor and
certain existing stockholders. Under the agreement, IDM received
approximately $491,000 after expenses, in exchange for 22,796 shares of
IDM's common stock (approximately 59,000 equivalent shares of RVSI common
stock). IDM used approximately $227,000 of the net proceeds to satisfy
certain notes payable and related accrued interest.
F-24
<PAGE>
Warrants Issued for Services Rendered - During fiscal 1996, the Company
-------------------------------------
issued warrants under certain agreements granting the holders thereof the
right through September 2000 to purchase up to approximately 47,000 shares
of the Company's common stock at exercise prices ranging from $12.88 to
$25.00 per share as compensation for professional services rendered. The
Company recorded an expense of approximately $74,000 related to the issuance
of such warrants.
During fiscal 1995, the Company issued warrants under certain agreements
granting the holders thereof the right through July 1999 to purchase up to
approximately 82,000 shares of the Company's common stock at exercise prices
ranging from $5.81 to $23.38 per share as compensation for professional
services rendered. The Company recorded an expense of approximately $92,000
related to the issuance of such warrants.
During fiscal 1994, the Company issued warrants for the purchase of 30,000
shares of the Company's common stock at an exercise price of $4.69 per share
as compensation for professional services rendered. The Company recorded an
expense of approximately $38,000 related to the issuance of such warrants.
Warrants Exercised - During fiscal 1996, the Company received approximately
------------------
$1,358,000 in connection with the issuance of approximately 1,014,000 shares
of its common stock upon the exercise of warrants to purchase such shares at
prices ranging between $1.00 and $9.00 per share.
During fiscal 1995, the Company received approximately $492,000 in
connection with the issuance of approximately 324,000 shares of its common
stock upon the exercise of warrants to purchase such shares at prices
ranging between $1.00 and $4.38 per share.
During fiscal 1994, the Company received approximately $270,000 in
connection with the issuance of approximately 243,000 shares of its common
stock upon the exercise of warrants to purchase such shares at prices
between $0.88 and $4.38 per share.
Warrants Outstanding - As of September 30, 1996, there were warrants
--------------------
outstanding to purchase approximately 271,000 shares of the Company's common
stock with exercise prices ranging between $1.00 and $25.00 per share.
Stock Option Plans - The Company has several stock option plans which
------------------
provide for the granting of options to employees or directors at prices and
terms as determined by the Board of Directors' Stock Option Committee. Such
options vest over a period of three to five years. All options issued by the
Company to date have exercise prices which were equal to market value of the
Company's common stock at the date of grant.
F-25
<PAGE>
The following table sets forth summarized information concerning the
Company's stock options:
<TABLE>
<CAPTION>
Number of Shares Exercise
(In Thousands) Price Range
-------------- ------------
<S> <C> <C> <C>
Options outstanding for shares of common stock at October 1, 1993 1,991 $ 0.53 - $38.72
Granted 366 3.63 - 15.06
Canceled or expired (67) 0.53 - 21.51
Exercised (352) 0.53 - 17.43
---------- ----------------
Options outstanding for shares of common stock at September 30, 1994 1,938 0.53 - 38.72
Granted 294 4.25 - 22.50
Canceled or expired (63) 0.53 - 17.43
Exercised (416) 0.53 - 17.43
---------- ----------------
Options outstanding for shares of common stock at September 30, 1995 1,753 0.53 - 38.72
Granted 1,798 12.88 - 26.75
Canceled or expired (208) 1.00 - 22.50
Exercised (498) 0.53 - 17.43
---------- ----------------
Options outstanding for shares of common stock at September 30, 1996 2,845 $ 0.53 - $38.72
========== ================
Options exercisable at September 30, 1996 867
==========
Shares reserved for issuance at September 30, 1996 3,181
==========
</TABLE>
14. SEPARATION COSTS
In June 1994, CI implemented a cost savings program which resulted in a
reduction in its work force. As part of this program, a charge of $469,000
was recorded consisting principally of employee severance and related
benefits.
15. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
The following consolidated quarterly information for 1996 and 1995 have
been restated to account for the merger with SEP (See Note 2) which has
been accounted for as a pooling of interests (in thousands of dollars,
except per share amounts):
<TABLE>
<CAPTION>
1996
------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- ---------
<S> <C> <C> <C> <C>
Revenues $36,279 $36,134 $36,083 $35,044
Gross profit $19,072 $18,255 $16,884 $14,660
Net income (loss) $ 4,727 $ 3,888 $ 2,857 $(1,746)
Net income (loss) per share $ 0.22 $ 0.18 $ 0.13 $ (0.08)
<CAPTION>
1995
-----------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- --------
<S> <C> <C> <C> <C>
Revenues $26,129 $28,498 $32,633 $34,865
Gross profit $13,796 $14,760 $16,749 $16,929
Net income $ 1,596 $ 4,891 $ 1,850 $ 2,658
Net income per share $ 0.08 $ 0.26 $ 0.09 $ 0.12
</TABLE>
F-26
<PAGE>
During the quarter ended September 30, 1996, the Company capitalized
approximately $590,000 of software development costs which should have been
capitalized during the first three quarters of the fiscal year ended
September 30, 1996.
During the quarter ended June 30, 1996, SEP became aware of a significant
problem with the performance of one of its products. The Company's
management believes it has resolved this problem and is in the process of
implementing necessary design changes. As a result, SEP recorded inventory,
warranty and accounts receivable reserves of approximately $1.8 million and
$1.1 million in the third and fourth quarters of fiscal 1996, respectively,
relating to the correction of this problem.
The quarterly net income per share information is computed separately for
each period. Therefore, the sum of such quarterly per share amounts may
differ from the total for the year.
16. MAJOR CUSTOMERS AND CREDIT CONCENTRATIONS
The Company grants credit to customers who are primarily in the
semiconductor industry. During 1996, revenues from a single customer
represented 13 percent of total revenues. No other customer accounted for
more than 10 percent of total revenues for fiscal 1996, 1995 and 1994.
17. GEOGRAPHIC OPERATIONS
For the purposes of segment reporting, management considers the Company
to operate in one industry, the machine vision industry. Operations in
this business segment by geographic area are summarized as follows (in
thousands of dollars):
<TABLE>
<CAPTION>
United
States Europe Eliminations Consolidated
-------- -------- ------------- ------------
<S> <C> <C> <C> <C>
Year ended September 30, 1996:
------------------------------
Revenues from unaffiliated customers $127,314 $16,226 $ - $143,540
Transfers between geographic areas 4,128 240 (4,368) -
-------- ------- ------- --------
Total revenues $131,442 $16,466 $(4,368) $143,540
======== ======= ======= ========
Income (loss) before income tax benefit (provision) $ 8,726 $ (201) $ 69 $ 8,594
======== ======= ======= ========
Identifiable assets $ 83,121 $ 7,085 $(8,143) $ 82,063
======== ======= =======
Corporate assets 14,922
--------
Total assets at September 30, 1996 $ 96,985
========
Year ended September 30, 1995:
-----------------------------
Revenues from unaffiliated customers $105,363 $16,762 $ - $122,125
Transfers between geographic areas 5,050 110 (5,160) -
-------- ------- ------- --------
Total revenues $110,413 $16,872 $(5,160) $122,125
======== ======= ======= ========
Income (loss) before income tax benefit (provision) $ 10,973 $ 65 $ (135) $ 10,903
======== ======= ======= ========
Identifiable assets $ 61,930 $ 7,465 $(6,985) $ 62,410
======== ======= =======
Corporate assets 16,296
--------
Total assets at September 30, 1995 $ 78,706
========
</TABLE>
F-27
<PAGE>
<TABLE>
<CAPTION>
United
States Europe Eliminations Consolidated
------ ------ ------------ ------------
<S> <C> <C> <C> <C>
Year ended September 30, 1994:
-----------------------------
Revenues from unaffiliated customers $ 77,242 $ 13,702 $ - $ 90,944
Transfers between geographic areas 3,287 97 (3,384) -
-------- -------- -------- --------
Total revenues $ 80,529 $ 13,799 $ (3,384) $ 90,944
======== ======== ======== ========
Income (loss) before income tax benefit (provision) $ 4,959 $ (101) $ (220) $ 4,638
======== ======== ======== ========
Identifiable assets $ 40,391 $ 6,544 $ (6,884) $ 40,051
======== ======== ========
Corporate assets 3,041
--------
Total assets at September 30, 1994 $ 43,092
========
</TABLE>
Total revenues to customers outside the U.S. were $92,957,000,
$79,334,000 and $44,350,000 for the years ended September 30, 1996, 1995
and 1994, respectively.
Export sales from the Company's United States operations to unaffiliated
customers were as follows:
<TABLE>
<CAPTION>
(in thousands)
Year Ended September 30,
------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Europe $ 9,160 $ 8,665 $ 1,897
Asia/Pacific Rim 66,398 53,609 28,469
Other 1,173 298 282
------- ------- -------
Total $76,731 $62,572 $30,648
======= ======= =======
</TABLE>
* * * * * * *
F-28
<PAGE>
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
- ---------------------------------------------
SUPPLEMENTAL SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
- -------------------------------------------------------------------------
(in thousands)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
Addition
----------------------
Charged to
Balance at Charged to Other Balance
beginning Cost and Accounts Deductions at end of
Descriptions of Period Expenses - describe - describe Period
------------ ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Year ended September 30, 1996:
Allowance for doubtful accounts $ 519 $ 882 $6(1) $107(2) $1,300
====== ====== == ==== ======
Reserve for excess and
obsolete inventory $ 957 $2,602 $149(2) $3,410
====== ====== ==== ======
Year ended September 30, 1995:
Allowance for doubtful accounts $ 605 $ 113 $8(1) $207(2) $ 519
====== ====== == ==== ======
Reserve for excess and
obsolete inventory $1,034 $ 280 $357(2) $ 957
====== ====== ==== ======
Year ended September 30, 1994:
Allowance for doubtful accounts $ 561 $ 117 $ - $ 73(2) $ 605
====== ====== === ==== ======
Reserve for excess and
obsolete inventory $1,070 $ 206 $242(2) $1,034
====== ====== ==== ======
</TABLE>
(1) Recoveries of accounts written off.
(2) Amounts written off.
F-29
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses in connection with
the offering described in the Registration Statement:
<TABLE>
<CAPTION>
<S> <C>
Registration Fee.............................................. $16,496.58
Accounting Fees and Expenses.................................. 7,500.00
Legal Fees and Expenses....................................... 7,500.00
Printing and Reproduction..................................... 1,000.00
Miscellaneous................................................. 1,003.42
----------
Total Expenses................. $32,500.00
==========
</TABLE>
Item 15. Indemnification of Directors and Officers
Article SEVENTH of the Restated Certificate of Incorporation of Robotic
Vision Systems, Inc. (the "Registrant") provides with respect to the
indemnification of directors and officers that the Registrant shall indemnify to
the fullest extent permitted by Section 145 of the Delaware General Corporation
Law, as amended from time to time, each person that such Section grants the
Registrant power to indemnify. Article TENTH of the Restated Certificate of
Incorporation of the Registrant also provides that no director shall be liable
to the corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except with respect to (1) a breach of the
director's duty of loyalty to the corporation or its stockholders, (2), acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (3) liability under Section 174 of the Delaware General
Corporation Law or (4) a transactions from which the director derived an
improper personal benefit, it being the intention of the foregoing provision to
eliminate the ability of the corporation's directors to the corporation or its
stockholders to the fullest extent permitted by Section 102(b)(7) of Delaware
General Corporation Law, as amended from time to time.
Section 145 of Delaware Corporation Law provides, inter alia, that to the
extent a director, officer, employee or agent of a corporation has been
successful on the merits or otherwise in defense of any action, suit or
proceeding, whether civil, criminal, administrative or investigative or in
defense of any claim, issue, or matter therein (hereinafter, a "Proceeding"), by
reason of the fact that he is or was a director, officer, employee or agent of a
corporation or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation or of a partnership,
joint venture, trust or other enterprise (collectively an "Agent" of the
corporation), he shall be
II-1
<PAGE>
indemnified against expenses (including attorney's fees) actually and reasonably
incurred by him in connection therewith.
Section 145 also provides that a corporation may indemnify any person who
was or is a party or is threatened to be made a party to any threatened
Proceeding by reason of the fact that he is or was an Agent of the corporation,
against expenses (including attorney's fees) judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; provided, however, that in
an action by or in the right of the corporation, the corporation may not
indemnify such person in respect of any claim, issue, or matter as to which he
is adjudged to be liable to the corporation unless, and only to the extent that,
the Court of Chancery or the court in which such proceeding was brought
determines that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is reasonably entitled to indemnity.
Item 16. Exhibits
5 Opinion of Parker Duryee Rosoff & Haft *
10(a) Stock and Warrant Purchase Agreement by and between Registrant
and General Motors Corporation dated as of December 12, 1984(1)
10(b) Agreement and Plan of Merger and Reorganization dated as of
October 1, 1996 among Registrant, RVSI Fourth Acquisition Corp.,
Systemation and the former shareholders of Systemation(2)\
11 Computation of per share amounts *
23(a) Consent of Deloitte & Touche LLP *
23(b) Consent of Arthur Andersen LLP *
23(c) Consent of Ernst & Young LLP *
23(d) Consent of Parker Duryee Rosoff & Haft (included in Exhibit 5
hereof) *
24 Power of Attorney (included on the signature page of Part II of
this Registration Statement.) *
- -------------
* Previously filed as an exhibit to this Registration Statement.
(1) Denotes document filed as an Exhibit to Registrant's Annual Report on
Form 10-K for its fiscal year ended September 30, 1984 and incorporated
herein by reference.
(2) Denotes document filed as an Exhibit to Registrant's Current Report on
Form 8-K dated October 9, 1996 relating to the Systemation Merger.
II-2
<PAGE>
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(2) That for the purpose of determining any liability under the Securities
Act of 1933, as amended (the "Securities Act"), each post-effective amendment
that contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(7) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement to include any material
information with respect to the plan of distribution not previously disclosed in
the Registration Statement or any material change to such information in the
Registration Statement.
(8) To remove from registration any means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(9) That, for purposes of determining any liability under the Securities
Act, each filing of Registrant's annual report pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
that is incorporated by reference in the Registration Statement, shall be deemed
to be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Registrant
pursuant to Item 15 of this Part II to the Registration Statement, or otherwise,
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by Registrant
of expenses incurred or paid by a director, officer or controlling person of
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against the public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Hauppauge, and State of New York, on the 29th day
of January, 1997.
ROBOTIC VISION SYSTEMS, INC.
By: /s/ Robert H. Walker
-------------------------------
Robert H. Walker
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
SIGNATURE TITLE DATE
Chairman of the
Board, President and
Director (Principal
* Executive Officer) January 29, 1997
- --------------------
Pat V. Costa
II-4
<PAGE>
<TABLE>
<S> <C> <C>
Executive Vice
President,
Secretary/Treasurer
and Director
(Principal Financial
Officer and
Principal Accounting
/s/ Robert H. Walker Officer) January 29, 1997
- -------------------------
Robert H. Walker
Senior Vice
President and
* Director January 29, 1997
- -------------------------
Howard Stern
Director
- -------------------------
Frank A. DiPietro
Director
- -------------------------
Donald F. Domnick
* Director January 29, 1997
- -------------------------
Jay M. Haft
Director
- -------------------------
Donald J. Kramer
* Director January 29, 1997
- -------------------------
Mark J. Lerner
</TABLE>
- ---------------------
* Robert H. Walker pursuant to the Powers of Attorney (executed by each of the
officers and directors listed above and indicated as sighting above, and filed
with the Securities and Exchange Commission) by signing his name hereto does
hereby sign and execute this Amendment to the Registration Statement on behalf
of each of the persons referenced above.
/s/ Robert H. Walker
-------------------------------
Robert H. Walker
January 29, 1997
II-5
