<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended JUNE 30, 2000 Commission File Number 0-8623
ROBOTIC VISION SYSTEMS, INC.
(Exact name of Registrant as specified in charter)
DELAWARE 11-2400145
(State or other jurisdiction of (IRS Employer
incorporation or Identification Number)
organization)
5 SHAWMUT ROAD, CANTON, MASSACHUSETTS 02021
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (781) 302-2439
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Number of shares of Common Stock outstanding as of August 8, 2000 35,183,219
No of Pages 12
<PAGE> 2
PART 1. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
2000 1999
------------ -------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................................ $ 27,379 $ 6,293
Accounts receivable, net................................................. 66,826 37,502
Inventories.............................................................. 46,415 32,553
Prepaid expenses and other current assets................................ 3,390 1,288
---------- ---------
Total current assets................................................... 144,010 77,636
Plant and equipment, net................................................... 13,315 12,281
Deferred income taxes...................................................... 8,820 8,820
Goodwill, net.............................................................. 4,862 5,250
Software development costs, net............................................ 14,111 13,965
Other assets............................................................... 7,634 5,249
---------- ---------
$ 192,752 $ 123,201
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of long-term debt...................... $ 233 $ 35,627
Accounts payable......................................................... 29,280 21,093
Accrued expenses and other current liabilities........................... 16,383 16,531
---------- ---------
Total current liabilities.............................................. 45,896 73,251
Long-term debt............................................................. 2,808 2,855
---------- ---------
Total liabilities...................................................... 48,704 76,106
Commitments and contingencies.............................................. -- --
Prepaid warrants........................................................... 8,644 9,105
Stockholders' Equity:
Common stock $0.01 par value; shares authorized 75,000; issued and
outstanding June 30, 2000 - 34,839 and September 30, 1999 - 27,354..... 348 274
Additional paid-in capital............................................... 267,109 179,466
Accumulated deficit...................................................... (131,623) (141,683)
Accumulated other comprehensive income................................... (430) (67)
---------- ---------
Total stockholders' equity............................................. 135,404 37,990
---------- ---------
$ 192,752 $ 123,201
========== =========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 3
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ------------------------
2000 1999 2000 1999
------------- ------------- ------------- --------
<S> <C> <C> <C> <C>
Revenues............................................ $63,278 $31,260 $ 167,101 $87,959
Cost of revenues.................................... 34,739 17,017 93,008 49,284
------- ------- --------- -------
Gross profit...................................... 28,539 14,243 74,093 38,675
------- ------- --------- -------
Operating costs and expenses:
Research and development expenses................... 7,217 4,804 19,684 15,276
Selling, general and administrative expenses........ 15,579 11,235 42,002 33,105
Severance and other charges......................... -- 255 -- 255
------- ------- -------- -------
Income (loss) from operations..................... 5,743 (2,051) 12,407 (9,961)
Gain (loss) on sale of assets....................... -- (63) -- 2,985
Interest income (expense), net...................... 212 (1,047) (1,551) (2,569)
------- -------- --------- -------
Income (loss) before income taxes................. 5,955 (3,161) 10,856 (9,545)
Provision for income taxes.......................... 119 -- 217 --
------- ------- --------- -------
Net income (loss)................................. 5,836 (3,161) 10,639 (9,545)
======= ======= ========= =======
Net income (loss) per share
Basic............................................. $ 0.16 $ (0.13) $ 0.33 $ (0.39)
======= ======= ========= =======
Diluted........................................... $ 0.14 $ (0.13) $ 0.27 $ (0.39)
======= ======= ========= =======
Weighted Average shares
Basic............................................. 34,389 25,837 30,690 25,197
Diluted........................................... 42,878 25,837 39,309 25,197
</TABLE>
See notes to consolidated financial statements.
3
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ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30,
------------------------
2000 1999
------------ --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss)................................................................... $ 10,639 $ (9,545)
Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization..................................................... 7,795 8,003
Gain on sale of assets............................................................ -- (2,985)
Changes in operating assets and liabilities
Accounts receivable............................................................. (29,324) 2,571
Inventories..................................................................... (13,862) 4,576
Prepaid expense and other current assets........................................ (2,102) (336)
Other assets.................................................................... (826) (48)
Accounts payable................................................................ 8,187 (2,574)
Accrued expenses and other current liabilities.................................. (1,455) (7,743)
-------- --------
Net cash used in operating activities........................................... (20,948) (8,081)
-------- --------
INVESTING ACTIVITIES:
Additions to plant and equipment, net............................................... (5,015) (1,511)
Additions to software development costs............................................. (3,130) (4,096)
Proceeds from sale of assets........................................................ -- 4,759
-------- --------
Net cash used in investing activities............................................. (8,145) (848)
-------- ---------
FINANCING ACTIVITIES:
Proceeds from the issuance of equity placements, net of offering costs.............. 79,249 12,518
Proceeds from the exercise of stock options and warrants............................ 6,367 20
Net payments of short-term borrowings............................................... (35,394) (2,358)
Repayment of long-term borrowings................................................... (47) (220)
-------- --------
Net cash provided by financing activities......................................... 50,175 9,960
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS........................ 4 23
NET INCREASE IN CASH AND CASH EQUIVALENTS........................................... 21,086 1,054
CASH AND CASH EQUIVALENTS:
Beginning of year................................................................. 6,293 2,421
-------- --------
End of period..................................................................... $ 27,379 $ 3,475
-------- --------
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid....................................................................... $ 3,082 $ 1,859
-------- --------
Taxes paid.......................................................................... $ 115 $ --
-------- --------
NONCASH INVESTING AND FINANCING ACTIVITIES:
Issuance of subordinated note payable in connection with asset purchase agreement... $ 2,000 $ --
-------- --------
Conversion of subordinated note payable and accrued interest into common stock...... $ (2,067) $ --
-------- --------
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except per share amounts)
1. CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Balance Sheet of Robotic Vision Systems, Inc., and
Subsidiaries (The "Company") as of June 30, 2000, the Consolidated Statement of
Operations for the three and nine month periods ended June 30, 2000 and 1999 and
the Consolidated Statement of Cash Flows for the nine month periods ended June
30, 2000 and 1999 have been prepared by the Company, without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial condition, results of
operations and cash flows for all periods presented have been made. The Balance
Sheet as of September 30, 1999 has been derived from the Company's audited
financial statements for the year ended September 30, 1999.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed consolidated financial
statements are not necessarily indicative of the operating results for the full
year and should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's Form 10-K for the year
ended September 30, 1999.
2. PUBLIC OFFERING
On February 23, 2000, the Company completed a public offering of 6,008
shares of common stock including 5,750 shares sold by the Company for net
proceeds of approximately $79,249, after selling expenses. Also, Polaroid
Corporation converted a subordinated note plus accrued interest into 258 shares
and sold them in the offering.
3. INVENTORIES
Inventories at June 30, 2000 and September 30, 1999 consisted of the
following:
<TABLE>
<CAPTION>
JUNE 30, 2000 SEPTEMBER 30, 1999
------------- ------------------
<S> <C> <C>
Raw Materials $27,945 $ 16,817
Work-in-Process 9,489 7,360
Finished Goods 8,981 8,376
------- --------
Total $46,415 $ 32,553
======= ========
</TABLE>
4. NOTES PAYABLE
On April 28, 2000, the Company entered into a three year $35,000 revolving
credit agreement. This agreement is collateralized by substantially all of the
domestic tangible and intangible assets of the Company. This agreement allows
for borrowings based on a 85% of eligible receivables plus up to a $10,000 of
availability provided under the Export-Import Bank of the United States
guarantee of certain foreign accounts receivables and inventories. The current
interest rate on the revolving credit, if the Company had borrowings under the
line, would be at the prime rate plus one-quarter percent. The Company also pays
a fee on the unused facility of three-eights of one percent per year.
5. SALE OF PRODUCT LINE
In December 1998, the Company sold its Aircraft Safety product line to a
subsidiary of B.F. Goodrich for $4,050 in cash. The Company no longer considered
this technology a key component of its product portfolio or future strategic
direction. The Company sold certain inventory, equipment and intellectual
property in the transaction, resulting in a gain of $2,985. Proceeds from the
sale were used for working capital requirements and to repay $2,025 of
outstanding bank debt.
5
<PAGE> 6
6. EARNINGS PER SHARE
Basic net income (loss) per share is computed using the weighted average
number of shares outstanding during each period. Diluted net income per share
reflects the effect of the Company's outstanding stock options and warrants
(using the treasury stock method), except where such options and warrants would
be anti-dilutive. The calculations for earnings per share for the three and nine
months ended June 30, 2000 and 1999 are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
BASIC EPS
Net income (loss)................................................. $ 5,836 $ (3,161) $ 10,639 $ (9,545)
Premium on prepaid warrants....................................... (193) (193) (578) (270)
-------- -------- -------- --------
Income (loss) - basic numerator................................... $ 5,643 $ (3,354) $ 10,061 $ (9,815)
-------- -------- -------- --------
Weighted average number of common shares - basic denominator...... 34,389 25,837 30,690 25,197
-------- -------- -------- --------
Net income (loss) per share - basic............................... $ 0.16 $ (0.13) $ 0.33 $ (0.39)
-------- -------- -------- --------
DILUTED EPS
Income (loss) - basic numerator 5,643 (3,354) 10,061 (9,815)
Effect of conversion of prepaid warrants......................... 193 -- 578 --
-------- -------- -------- --------
Income (loss) - diluted numerator................................. $ 5,836 $ (3,354) $ 10,639 $ (9,815)
-------- -------- -------- --------
Weighted average number of common shares - basic denominator...... 34,389 25,837 30,690 25,197
Effect of conversion of prepaid warrants......................... 2,778 -- 2,778 --
Effect of other dilutive common stock options and warrants........ 5,711 -- 5,841 --
-------- -------- -------- --------
Weighted average number of common and common equivalent shares -
diluted denominator............................................. 42,878 25,837 39,309 25,197
-------- -------- -------- --------
Net income (loss) per share - diluted............................. $ 0.14 $ (0.13) $ 0.27 $ (0.39)
-------- -------- -------- --------
</TABLE>
For the three and nine months ended June 30, 2000, the Company had common
stock options and warrants excluded from the earnings per share calculations of
128 and 365 respectively, as they were anti-dilutive. For the three and nine
months ended June 30, 1999, the Company had common stock options and warrants
excluded from the earnings per share calculations of 9,076 and 7,770
respectively, as they were anti-dilutive.
7. COMPREHENSIVE INCOME (LOSS)
In addition to net income or loss, the only item that the Company currently
records as other comprehensive income or loss is the change in the cumulative
translation adjustment resulting from the changes in exchange rates and the
effect of those changes upon translation of the financial statements of the
Company's foreign operations. For the three months ended June 30, 2000 and 1999,
total comprehensive income (loss) of $5,663 and $(3,452), respectively, included
net income (loss) of $5,836 and $(3,161), respectively, and foreign currency
translation adjustments of $(173) and $(291), respectively. For the nine months
ended June 30, 2000 and 1999, total comprehensive income (loss) of $10,276 and
$(9,836), respectively, included net income (loss) of $10,639 and $(9,545),
respectively, and foreign currency translation adjustments of $(363) and $(291),
respectively.
6
<PAGE> 7
8. SEGMENT INFORMATION
The Company operates in two reporting segments of the machine vision
industry. Intersegment sales by the Acuity CiMatrix division were $1,404 and
$298 for the three months ended June 30, 2000 and 1999, respectively. For the
first nine months of fiscal 2000 and 1999, intersegment sales by the Acuity
CiMatrix division were $3,036 and $1,100 respectively. Other income (loss) is
comprised of corporate general and administrative expenses. The following table
presents information about the Company's reportable segments for the three and
nine months ended June 30:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
------- ------- --------- -------
<S> <C> <C> <C> <C>
REVENUES:
Semiconductor Equipment............................... $47,944 $20,139 $ 128,973 $54,483
Acuity CiMatrix....................................... 15,334 11,121 38,128 33,476
------- ------- --------- -------
Total Revenues........................................ $63,278 $31,260 $ 167,101 $87,959
------- ------- --------- -------
INCOME (LOSS) FROM OPERATIONS
Semiconductor Equipment............................... $ 6,705 $ (165) $ 17,374 $(1,779)
Acuity CiMatrix....................................... 1,059 232 413 (2,482)
Other................................................. (2,021) (2,118) (5,380) (5,698)
------- ------- --------- -------
Total income(loss) from operations................... $ 5,743 $(2,051) $ 12,407 $(9,963)
------- ------- --------- -------
DEPRECIATION AND AMORTIZATION
Semiconductor Equipment............................... $ 1,942 $ 2,053 $ 5,470 $ 5,527
Acuity CiMatrix....................................... 765 673 2,325 2,476
------- ------- --------- -------
Total depreciation and amortization................... $ 2,707 $ 2,726 $ 7,795 $ 8,003
------- ------- --------- -------
</TABLE>
9. RECLASSIFICATION OF WARRANT PREMIUM
In March 2000, the Company has determined that it intends to pay cash
instead of shares for the warrant premium upon conversion of the prepaid
warrant, and has reclassified $847 from prepaid warrants to accrued expenses.
7
<PAGE> 8
ROBOTIC VISION SYSTEMS, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Three and Nine Months Ended June 30, 2000 Compared to Three and Nine Months
Ended June 30, 1999
RESULTS OF OPERATIONS
Revenues were $63.3 million for the three months ended June 30, 2000
compared to $31.3 million for the three months ended June 30, 1999, an increase
of 102.4%. The higher revenues were associated with increased shipments of
semiconductor inspection and handling equipment, as well as vision and one and
two-dimensional bar code reading systems. In the three months ended June 30,
2000, revenues for the Company's Semiconductor Equipment Group represented 75.8%
of total revenues, compared to 64.4% of total revenues in the three months ended
June 30, 1999 and 80.6% of total revenues for the three months ended March 31,
2000.
Revenues were $167.1 million for the nine months ended June 30, 2000
compared to $88.0 million for the nine months ended June 30, 1999, an increase
of 90.0%. The increase in revenues year-to-year was due to the same factors as
in the current quarter. In the nine months ended June 30, 2000, revenues for the
Company's Semiconductor Equipment Group represented 77.2% of total revenues,
compared to 61.9% of total revenues in the nine months ended June 30, 1999.
The gross profit margin was essentially unchanged at 45.1% of revenues for
the three months ended June 30, 2000 compared to 45.6% of revenues for the three
months ended June 30, 1999. Gross profit margins for the quarter improved
approximately 150 basis points over the second quarter of fiscal 2000. Gross
profit margins improved at both the Company's Semiconductor Equipment Group and
Acuity CiMatrix division versus the second quarter of fiscal 2000, and overall
margins were aided by the higher percentage of the total Company's sales
attributable to the Acuity CiMatrix division. The gross profit margin was 44.3%
of revenues in the nine months ended June 30, 2000 compared to 44.0% of revenues
in the nine months ended June 30, 1999.
Research and development expenses were $7.2 million, or 11.4% of revenues,
in the three months ended June 30, 2000, compared to $4.8 million, or 15.4% of
revenues, in the three months ended June 30, 1999. The higher level of expense
dollars reflects spending associated with the Company's continued efforts to
invest in new product development. On the Company's Semiconductor Equipment
Group side, the projects included work on new semiconductor inspection and
component handling systems, as well as, ball-placement equipment. At Acuity
CiMatrix, the Company continued to invest in enhancing its 1-D and 2-D barcode
reading products and expanding its new matching vision platform, Visionscape. In
the three months ended June 30, 2000, the Company capitalized $1.1 million in
software development costs under Statement of Financial Accounting Standards No.
86, compared to $1.3 million in the three months ended June 30, 1999.
Research and development expenses were $19.7 million, or 11.8% of revenues,
in the nine months ended June 30, 2000, compared to $15.3 million, or 17.4% of
revenues, in the nine months ended June 30, 1999. The increase in spending
year-to-year was due to the same factors that affected the current quarter. In
the nine months ended June 30, 2000, the Company capitalized $3.1 million in
software development costs under Statement of Financial Accounting Standards No.
86, compared to $4.0 million in the nine months ended June 30, 1999.
Selling, general and administrative expenses were $15.6 million, or 24.6%
of revenues, in the three months ended June 30, 2000, compared to $11.2 million,
or 35.9% of revenues, in the three months ended June 30, 1999. The higher level
of expense reflects a combination of higher variable selling expenses associated
with the increase in revenues, including commissions, salaries and related
expenses.
Selling, general and administrative expenses were $42.0 million, or 25.1%
of revenues, in the nine months ended June 30, 2000, compared to $33.1 million,
or 37.6% of revenues, in the nine months ended June 30, 1999. The higher expense
dollars year-to-year were primarily related to same factors that affected
quarterly expenses.
Severance and other charges were $0.3 million for the three and nine months
ended June 30, 1999, and primarily related to reductions in personnel,
particularly in Europe.
In fiscal 1999, the Company sold its Aircraft Safety division to a
subsidiary of B.F. Goodrich for $4.05 million in cash. The Company no longer
considered this technology a key component of its product portfolio or future
strategic direction. The Company sold certain inventory, equipment and
intellectual property in the transaction, resulting in a gain of $3.0 million.
Proceeds from the
8
<PAGE> 9
sale were used for working capital requirements and to repay $2.0 million of
outstanding bank debt.
Net interest income was $0.2 million in the three months ended June 30,
2000 compared to net interest expense of $1.0 million in the three months ended
June 30, 1999. The third quarter of fiscal 2000 was the first full quarter
following our secondary offering, the proceeds from which were used to repay
$35.3 million of bank debt. Net interest expense was $1.6 million in the nine
months ended June 30, 2000 compared to $2.6 million in the nine months ended
June 30, 1999. The decrease in interest expense year-to-year was due to the same
factors that affected the current quarter.
The tax provision for the three and nine months ended June 30, 2000
reflected minimum federal income taxes. There was no tax provision in the three
and nine months ended June 30, 1999, due to the loss in those fiscal periods.
Net income was $5.8 million for the three months ended June 30, 2000,
compared with a net loss of $3.2 million for the three months ended June 30,
1999. Net income was $10.6 million for the nine months ended June 30, 2000,
compared with a net loss of $9.5 million for the nine months ended June 30,
1999. Excluding the $3.0 million gain from the sale of the Company's Aircraft
Safety division, the net loss for the nine months ended June 30, 1999 was $12.5
million.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash balance increased $21.1 million, to $27.4 million, in
the nine months ended June 30, 2000. Net cash of $50.2 million was provided by
financing activities, offset by $20.9 million of net cash used in operating
activities and $8.1 million of net cash used in investing activities.
The $50.2 million of net cash provided by financing activities was
primarily the result of the proceeds of the Company's public offering of $79.2
million and other proceeds of exercises of stock options and warrants of $6.4
million, which was offset debt repayments of $35.4 million.
The $20.9 million of net cash used in operating activities was primarily a
result of an increase in accounts receivable of $29.3 million and a $13.9
million increase in inventories, partially offset by net income $10.6 million,
depreciation and amortization of $7.8 million and a $8.2 million increase in
accounts payable.
Additions to plant and equipment were $5.0 million in the nine months ended
June 30, 2000, as compared to $1.5 million the nine months ended June 30, 1999.
Capitalized software development costs in the nine months ended June 30, 2000
were $3.1 million.
On April 28, 2000, the Company entered into a three year $35.0 million
revolving credit agreement. This agreement is collateralized by substantially
all of the domestic tangible and intangible assets of the Company. This
agreement allows for borrowings based on a 85% of eligible receivables plus up
to a $10.0 million of availability provided under the Export-Import Bank of the
United States guarantee of certain foreign accounts receivables and inventories.
The current interest rate on the revolving credit, if the Company had borrowings
under the line, would be at the prime rate plus one-quarter percent. The Company
also pays a fee on the unused facility of three-eights of one percent per year.
Management believes that through its current cash balances, working capital
and bank financing, the Company will have sufficient liquidity to fund its cash
requirements for at least the next 12 months.
EFFECT OF INFLATION
Management believes that during the three months ended June 30, 2000 the
effect of inflation was not material.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 requires companies to
record derivatives on the balance sheet as assets or liabilities at fair value.
SFAS 137 "Accounting for Derivative Instruments and Hedging Activities Deferral
of the Effective Date of FASB Statement No. 133 an Amendment of FASB Statement
No. 133" was issued in June 1999, which delayed the effective date of SFAS 133
to fiscal years beginning after June 15, 2000. SFAS No. 138 "Accounting for
Certain Derivative Instruments and Hedging Activities - an Amendment of FASB
Statement No. 133" was issued in June 2000 and amends certain accounting and
reporting standards of SFAS 133. The Company is evaluating the impact of SFAS
133, as amended, on the Company's future earnings and financial position, but
does not expect it to be material.
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
Statements." SAB No. 101 summarizes certain of the SEC's views in applying
revenue recognition in financial statements. The SEC issued SAB No. 101B,
delaying implementation of the provisions of SAB No. 101 until the Company's
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<PAGE> 10
fourth quarter of fiscal 2001. The Company has not completed its evaluation of
the effects of SAB No. 101.
FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS
This report contains forward-looking statements including statements
regarding, among other items, financing activities and anticipated trends in the
Company's business, which are made pursuant to the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These statements are based
largely on the Company's expectations and are subject to a number risks and
uncertainties, some of which cannot be predicted or quantified and are beyond
the Company's control, including the following: its principal market is the
highly cyclical semiconductor industry which causes a cyclical impact on its
financial results; the Company's return to sustained profitability cannot be
assured; the market for semiconductor capital equipment is highly concentrated;
economic difficulties encountered by certain of the Company's foreign customers
have resulted in order cancellations and reduced collections of outstanding
accounts receivable; development of the Company's products requires significant
lead time and it may fail to correctly anticipate the technical needs of its
markets; the Company's success is dependent on its ability to hire and retain
qualified personnel; the large number of shares available for future sale could
adversely affect the price of the Company's common stock; and the Company's
stock price is volatile.
Future events and actual results could differ materially from those set
forth in, contemplated by, or underlying the forward-looking statements.
Statements in this report, including those set forth above, describe factors,
among others, that could contribute to or cause such differences.
This 10-Q should be read in conjunction with detailed risk factors in the
Company's most recent registration statement, and other risk factors in the
Company's annual report on Form 10-K, and other filings with the Securities and
Exchange Commission.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Financial instruments that potentially subject the Company to
concentrations of credit-risk consist principally of cash equivalents and trade
receivables. The Company places its cash equivalents with high-quality financial
institutions, limits the amount of credit exposure to any one institution and
has established investment guidelines relative to diversification and maturities
designed to be maintain safety and liquidity. The Company's trade receivables
result primarily from sales to semiconductors manufacturers located in North
America, Japan, the Pacific Rim and Europe. Receivables are mostly from major
corporations, distributors or are supported by letters of credit. The Company
maintains reserves for potential credit losses.
The Company is also exposed to the impact of foreign currency fluctuations.
During fiscal 1999, most local currencies of its international subsidiaries
weakened against the U.S. dollar. Since the Company translates foreign
currencies into U.S. dollars for reporting purposes, these weakened currencies
have a negative, though immaterial, impact on its results. The Company believes
that its exposure to currency exchange fluctuation is insignificant because its
international subsidiaries sell to customers, and satisfy their financial
obligations, almost exclusively in their local currencies. During fiscal 1999
and 2000, the Company did not engage in foreign currency hedging activities.
Based on a hypothetical ten percent adverse movement in foreign currency
exchange rates, the potential losses in future earnings, the fair value of
risk-sensitive instruments, and cash flow are immaterial, although the actual
effects may differ materially from this hypothetical analysis.
The Company estimates the fair value of its notes payable and long-term
liabilities based on quoted market prices for the same or similar issues or on
current rates offered to it for debt of the same remaining maturities. For all
other balance sheet financial instruments, the carrying amount approximates fair
value.
10
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PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 -- Financial Data Schedule
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant had duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROBOTIC VISION SYSTEMS, INC.
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Registrant
Dated: August 11, 2000 /s/ PAT V. COSTA
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PAT V. COSTA
President and CEO
(Principal Executive Officer)
Dated: August 11, 2000 /s/ FRANK D. EDWARDS
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FRANK D. EDWARDS
Chief Financial Officer
(Principal Financial and Accounting Officer)
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