<PAGE> 1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly Report pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934 for the quarterly period ended July 5, 1998 or
Transition Report pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934 for the transition period from _______ to _________
COMMISSION FILE NUMBER 0-17869
-------
COGNEX CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2713778
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE VISION DRIVE
NATICK, MASSACHUSETTS 01760-2059
(508) 650-3000
-------------------------------------------
(Address, including zip code, and telephone
number, including area code, of principal
executive offices)
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 12 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
----- -----
As of August 2, 1998, there were 40,889,808 shares of Common Stock, $.002
par value, of the registrant outstanding.
Total number of pages: 13
Exhibit index is located on page 12
================================================================================
<PAGE> 2
INDEX
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income for the three and six months ended
July 5, 1998 and June 29, 1997
Consolidated Balance Sheets at July 5, 1998 and December 31, 1997
Consolidated Statement of Stockholders' Equity for the six months
ended July 5, 1998
Consolidated Statements of Cash Flows for the six months ended July 5,
1998 and June 29, 1997
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
JULY 5, JUNE 29, JULY 5, JUNE 29,
1998 1997 1998 1997
------- -------- ------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenue ............................................................. $32,036 $36,271 $72,092 $64,414
Cost of revenue ..................................................... 9,474 9,940 20,401 17,635
------- ------- ------- -------
Gross margin ........................................................ 22,562 26,331 51,691 46,779
Research, development and engineering expenses ...................... 5,950 5,346 12,255 10,525
Selling, general and administrative ................................. 9,393 8,916 19,262 16,335
------- ------- ------- -------
Income from operations .............................................. 7,219 12,069 20,174 19,919
Investment income ................................................... 1,791 1,244 3,519 2,577
Other income ........................................................ 171 172 336 329
------- ------- ------- -------
Income before provision for income taxes ............................ 9,181 13,485 24,029 22,825
Provision for income taxes .......................................... 2,664 4,113 6,970 6,962
------- ------- ------- -------
Net income .......................................................... $ 6,517 $ 9,372 $17,059 $15,863
======= ======= ======= =======
Net income per share:
Basic ........................................................... $ .16 $ .23 $ .41 $ .39
======= ======= ======= =======
Diluted ......................................................... $ .15 $ .21 $ .39 $ .36
======= ======= ======= =======
Weighted-average common and common equivalent shares outstanding:
Basic ........................................................... 41,424 41,156 41,616 41,040
======= ======= ======= =======
Diluted ......................................................... 43,906 44,539 44,182 44,267
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
1
<PAGE> 4
<TABLE>
<CAPTION>
COGNEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
JULY 5, DECEMBER 31,
1998 1997
----------- ------------
ASSETS (UNAUDITED)
<S> <C> <C>
Current assets:
Cash and investments ..................................................... $160,589 $178,014
Accounts receivable, less reserves of $2,270 and $1,940 in 1998 and
1997, respectively .................................................... 27,566 25,095
Revenue in excess of billings ............................................ 3,500 3,723
Inventories .............................................................. 9,704 7,784
Deferred income taxes .................................................... 3,996 3,453
Prepaid expenses and other ............................................... 5,470 5,937
-------- --------
Total current assets ................................................. 210,825 224,006
Property, plant and equipment, net ............................................ 34,574 32,995
Other assets .................................................................. 4,688 3,462
Deferred income taxes ......................................................... 1,520 1,377
-------- --------
$251,607 $261,840
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ......................................................... $ 2,328 $ 3,332
Accrued expenses ......................................................... 11,712 13,712
Accrued income taxes ..................................................... 1,364 2,684
Customer deposits ........................................................ 2,307 3,112
Deferred revenue ......................................................... 2,365 1,596
-------- --------
Total current liabilities ............................................ 20,076 24,436
-------- --------
Other liabilities ............................................................. 1,261 1,262
Stockholders' equity:
Common stock, $.002 par value -
Authorized: 120,000,000 shares, issued: 42,165,774 and 41,859,395
shares in 1998 and 1997, respectively ................................. 84 84
Additional paid-in capital ............................................... 93,793 91,082
Cumulative translation adjustment ........................................ (71) 44
Retained earnings ........................................................ 163,427 146,368
Treasury stock, at cost, 1,298,020 and 103,139 shares in 1998 and
1997, respectively .................................................... (26,963) (1,436)
-------- --------
Total stockholders' equity ........................................... 230,270 236,142
-------- --------
$251,607 $261,840
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
2
<PAGE> 5
<TABLE>
<CAPTION>
COGNEX CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Dollars in thousands)
COMMON STOCK ADDITIONAL CUMULATIVE TREASURY STOCK TOTAL
------------------- PAID-IN TRANSLATION RETAINED -------------------- STOCKHOLDERS'
SHARES PAR VALUE CAPITAL ADJUSTMENT EARNINGS SHARES COST EQUITY
---------- --------- ------- ---------- -------- --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997 ............... 41,859,395 $84 $91,082 $ 44 $146,368 103,139 $ (1,436) $236,142
Issuance of common stock under stock
option and stock purchase plans ....... 306,379 1,846 1,846
Tax benefit from exercise of stock
options ............................... 865 865
Common stock received for payment of
stock option exercises ................ 2,881 (75) (75)
Repurchase of common stock ............... 1,192,000 (25,452) (25,452)
Translation adjustment ................... (115) (115)
Net income ............................... 17,059 17,059
---------- --- ------- ----- -------- --------- -------- --------
Balance at July 5, 1998 (unaudited) ........ 42,165,774 $84 $93,793 $ (71) $163,427 1,298,020 $(26,963) $230,270
========== === ======= ===== ======== ========= ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE> 6
<TABLE>
<CAPTION>
COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
SIX MONTHS ENDED
JULY 5, JUNE 29,
1998 1997
-------- --------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income ............................................................... $ 17,059 $ 15,863
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization .......................................... 4,397 2,758
Tax benefit from exercise of stock options ............................. 865 2,302
Deferred income tax provision .......................................... (686) 16
Change in other current assets and current liabilities ................. (8,041) (9,156)
Other .................................................................. (1,582)
-------- --------
Net cash provided by operating activities ................................ 12,012 11,783
-------- --------
Cash flows from investing activities:
Purchase of investments .................................................. (38,736) (32,095)
Maturity of investments .................................................. 37,831 20,977
Purchase of property, plant and equipment ................................ (4,908) (6,102)
Cash paid related to Mayan acquisition ................................... (432)
Other 496
-------- --------
Net cash used in investing activities .................................... (6,245) (16,724)
-------- --------
Cash flows from financing activities:
Issuance of common stock under stock option and stock purchase plans ..... 1,771 1,503
Repurchase of common stock ............................................... (25,452)
-------- --------
Net cash (used in)/provided by financing activities ...................... (23,681) 1,503
-------- --------
Effect of exchange rate changes on cash ....................................... 441 (182)
-------- --------
Net decrease in cash and cash equivalents ..................................... (17,473) (3,620)
Cash and cash equivalents at beginning of period .............................. 38,198 48,423
-------- --------
Cash and cash equivalents at end of period .................................... 20,725 44,803
Investments ................................................................... 139,864 96,695
-------- --------
Cash and investments .......................................................... $160,589 $141,498
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
4
<PAGE> 7
COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
---------------------
As permitted by the rules of the Securities and Exchange Commission
applicable to Quarterly Reports on Form 10-Q, these notes are condensed and
do not contain all disclosures required by generally accepted accounting
principles. Reference should be made to the consolidated financial
statements and related notes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 1997, as filed with the
Securities and Exchange Commission on March 27, 1998.
In the opinion of the management of Cognex Corporation, the accompanying
consolidated financial statements contain all adjustments (consisting of
only normal, recurring adjustments) necessary to present fairly the
Company's financial position at July 5, 1998, and the results of operations
for the three and six months ended July 5, 1998, and changes in
stockholders' equity and cash flows for the six months ended July 5, 1998.
The results disclosed in the Consolidated Statements of Income for the
three and six months ended July 5, 1998 are not necessarily indicative of
the results to be expected for the full year.
Certain amounts reported in prior periods have been reclassified to be
consistent with the current period's presentation.
INVENTORIES
<TABLE>
<CAPTION>
Inventories consist of the following:
(In thousands) JULY 5, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED)
<S> <C> <C>
Raw materials ...................................... $4,583 $4,425
Work-in-process .................................... 1,896 1,355
Finished goods ..................................... 3,225 2,004
------ ------
$9,704 $7,784
====== ======
</TABLE>
5
<PAGE> 8
COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NET INCOME PER SHARE
<TABLE>
<CAPTION>
Net income per share is calculated as follows:
(In thousands) THREE MONTHS ENDED SIX MONTHS ENDED
JULY 5, JUNE 29, JULY 5, JUNE 29,
1998 1997 1998 1997
------- --------- ------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net income .................................................................. $ 6,517 $ 9,372 $17,059 $15,863
======= ======= ======= =======
BASIC:
Weighted-average common shares outstanding .............................. 41,424 41,156 41,616 41,040
======= ======= ======= =======
Net income per common share ............................................. $ .16 $ .23 $ .41 $ .39
======= ======= ======= =======
DILUTED:
Weighted-average common shares outstanding .............................. 41,424 41,156 41,616 41,040
Effect of dilutive securities:
Stock options ........................................................ 2,482 3,383 2,566 3,227
------- ------- ------- -------
Weighted-average common and common equivalent
shares outstanding ................................................... 43,906 44,539 44,182 44,267
======= ======= ======= =======
Net income per common and common equivalent share ....................... $ .15 $ .21 $ .39 $ .36
======= ======= ======= =======
</TABLE>
COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standards (SFAS) No.
130, "Reporting Comprehensive Income," effective January 1, 1998. SFAS No. 130
requires that all items recognized under accounting standards as components of
comprehensive income be shown in an annual financial statement that is displayed
with the same prominence as other annual financial statements. This statement
also requires that an entity classify items of other comprehensive income by
their nature in an annual financial statement. Other comprehensive income
consists of foreign currency translation adjustments. Comprehensive income
totaled $6,444,000 and $16,944,000 for the three and six months ended July 5,
1998 and $9,313,000 and $15,830,000 for the three and six months ended June 29,
1997.
STOCK REPURCHASE PROGRAM
On April 21, 1998, the Company's Board of Directors authorized the repurchase of
up to $20,000,000 of the Company's common stock. A total of 882,000 shares were
repurchased through May 27, 1998 amounting to $19,936,694 which completed the
Company's repurchases under this program. On June 3, 1998, the Board authorized
the repurchase of up to an additional 1,500,000 shares of the Company's common
stock. As of July 5, 1998, 310,000 shares have been repurchased under this
second program amounting to $5,515,315. Such repurchases are part of the
Company's ongoing program to replenish shares used for the granting of stock
options and are made from time to time in the open market or in private
transactions depending upon acceptable price levels and the availability of
shares. Funds for the repurchases come from the Company's existing cash and
investment balances along with cash generated from operations.
6
<PAGE> 9
COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SUBSEQUENT EVENT
On July 28, 1998, the Company signed a definitive agreement to form a global
relationship with Rockwell Automation. Under the agreement, the Company paid
cash for certain technologies of Rockwell Automation's Allen Bradley machine
vision business and has become the preferred supplier of machine vision products
to Rockwell Automation's customers worldwide. This transaction is not expected
to materially impact the Company's financial position, results of operations, or
cash flows in 1998, excluding an expected charge for in-process technology in
the third quarter of approximately $1,000,000 to $2,000,000.
7
<PAGE> 10
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Revenue for the three-month and six-month periods ended July 5, 1998 totaled
$32,036,000 and $72,092,000, respectively, compared to $36,271,000 and
$64,414,000 for the same periods in 1997, representing a 12% decrease for the
three-month period and a 12% increase for the six-month period. Historically,
the Company's revenue has fluctuated with the capital spending trends of its
core Original Equipment Manufacturer (OEM) customers serving the semiconductor
and electronics industries. The Company's results for the second quarter of 1998
were impacted by a worldwide slowdown in capital spending in these industries,
caused in part by the current Asian financial crisis.
The decrease in revenue of $4,235,000, or 12%, for the three-month period is due
primarily to decreased volume from the Company's OEM customers. Sales to OEM
customers decreased $7,138,000, or 28%, from the second quarter of 1997. Sales
to end user customers, however, increased $2,903,000, or 27%, from the second
quarter of 1997 due primarily to increased volume resulting from additional
sales and marketing resources serving customers in this market, as well as sales
of Fine-Line products which the Company acquired from Mayan Automation, Inc. in
a purchase transaction on July 31, 1997.
The increase in revenue of $7,678,000, or 12%, for the six-month period is due
primarily to increased volume from the Company's end user customers. Sales to
end user customers increased $7,212,000, or 35%, from the prior year resulting
again from additional sales and marketing resources serving customers in this
market, as well as sales of Fine-Line products. Sales to OEM customers, however,
remained fairly consistent with the prior year, as the increased volume achieved
in the first quarter of 1998 over the first quarter of 1997 was almost
completely offset by the decreased volume experienced in the second quarter of
1998 over the second quarter of 1997.
The Company anticipates that its results for the remainder of 1998 will continue
to be impacted by the worldwide slowdown in capital spending in the
semiconductor and electronics industries due to indications that a recovery in
these industries may not happen until 1999. Accordingly, the Company anticipates
that revenue for the second half of 1998 will continue to be lower than both the
levels achieved in the second half of 1997 as well as the first half of 1998.
Gross margin as a percentage of revenue for the three-month and six-month
periods ended July 5, 1998 was 70% and 72%, respectively, compared to 73% for
the same periods in 1997. The decrease in gross margin as a percentage of
revenue is due primarily to higher service costs in 1998 as the Company builds
its worldwide service and support team. Gross margin as a percentage of revenue
may continue to decrease during the second half of 1998 as manufacturing
overhead expenses may not be fully absorbed by the volume of machine vision
systems manufactured.
8
<PAGE> 11
RESULTS OF OPERATIONS, CONTINUED
Research, development and engineering expenses for the three-month and six-month
periods ended July 5, 1998 totaled $5,950,000 and $12,255,000, respectively,
compared to $5,346,000 and $10,525,000 for the same periods in 1997,
representing an 11% increase for the three-month period and a 16% increase for
the six-month period. The increase in aggregate expenses is due primarily to
higher personnel-related costs to support the Company's continued investment in
the research and development of new and existing products. Expenses as a
percentage of revenue were 19% and 17% for the three-month and six-month periods
in 1998, compared to 15% and 16% for the same periods in 1997. The increase in
expenses as a percentage of revenue is due primarily to the growth in research,
development and engineering expenses outpacing the growth in revenue. The
Company intends to continue its product development efforts, and therefore, the
level of research, development and engineering expenses as a percentage of
revenue may continue to increase during the second half of 1998.
Selling, general and administrative expenses for the three-month and six-month
periods ended July 5, 1998 totaled $9,393,000 and $19,262,000, respectively,
compared to $8,916,000 and $16,335,000 for the same periods in 1997,
representing a 5% increase for the three-month period and an 18% increase for
the six-month period. The increase in aggregate expenses is due primarily to
higher personnel-related costs, both domestically and internationally, to
support the Company's expanding worldwide operations. Expenses as a percentage
of revenue were 29% and 27% for the three-month and six-month periods in 1998,
compared to 25% for the same periods in 1997. The increase in expenses as a
percentage of revenue is due primarily to the growth in selling, general and
administrative expenses outpacing the growth in revenue. The Company intends to
continue its efforts to further penetrate the end user market, and therefore,
the level of selling, general and administrative expenses as a percentage of
revenue may continue to increase during the second half of 1998.
Investment income for the three-month and six-month periods ended July 5, 1998
totaled $1,791,000 and $3,519,000, respectively, compared to $1,244,000 and
$2,577,000 for the same periods in 1997, representing a 44% increase for the
three-month period and a 37% increase for the six-month period. The increase in
investment income is due primarily to an increase in the Company's invested cash
balance during 1998.
The Company's effective tax rate was 29.0% for the three-month and six-month
periods ended July 5, 1998 compared to 30.5% for the same periods in 1997. The
decrease in the effective tax rate is primarily attributable to a higher tax
benefit associated with the Company's foreign sales corporation.
On July 28, 1998, the Company signed a definitive agreement to form a global
relationship with Rockwell Automation. Under the agreement, the Company paid
cash for certain technologies of Rockwell Automation's Allen Bradley machine
vision business and has become the preferred supplier of machine vision products
to Rockwell Automation's customers worldwide. This transaction is not expected
to materially impact the Company's financial position, results of operations, or
cash flows in 1998, excluding an expected charge for in-process technology in
the third quarter of approximately $1,000,000 to $2,000,000.
9
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements during the six-month period ended July 5, 1998
were met through cash generated from operations along with existing cash and
investments balances. Cash and investments decreased $17,425,000 from December
31, 1997 primarily as a result of $25,452,000 of cash used to repurchase the
Company's common stock and $4,908,000 of capital expenditures, partially offset
by $12,012,000 of cash generated from operations.
Capital expenditures for the six-month period ended July 5, 1998 totaled
$4,908,000 and consisted primarily of expenditures for computer hardware and
software, as well as expenditures for furniture and fixtures primarily related
to the occupancy of the 50,000 square-foot expansion of the Company's corporate
headquarters and expenditures for leasehold improvements related to a new office
in Japan.
On April 21, 1998, the Company's Board of Directors authorized the repurchase of
up to $20,000,000 of the Company's common stock. A total of 882,000 shares were
repurchased through May 27, 1998 amounting to $19,936,694 which completed the
Company's repurchases under this program. On June 3, 1998, the Board authorized
the repurchase of up to an additional 1,500,000 shares of the Company's common
stock. As of July 5, 1998, 310,000 shares have been repurchased under this
second stock repurchase program amounting to $5,515,315. Funds for the
repurchases come from the Company's existing cash and investment balances along
with cash generated from operations.
Based on a recent assessment, the Company has determined that its internal
computer systems are capable of processing transactions relating to the year
2000 and beyond. The Company has also implemented a year 2000 testing and
remediation plan with respect to its products and, to the best of its knowledge,
the Company does not have any material exposure to contingencies related to year
2000 issues for its products. Additionally, the Company has initiated formal
communications with its significant suppliers to determine the extent to which
the Company is vulnerable to those third parties' failures to remediate their
own year 2000 issues. Although the Company is only in the preliminary stages of
assessing the impact of year 2000 issues and no assurances can be given, the
Company does not believe that year 2000 expenses will have a material impact on
its business.
On June 15, 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 is effective for
all fiscal quarters of all fiscal years beginning after June 15, 1999. SFAS No.
133 requires that all derivative instruments be recorded on the balance sheet at
their fair value. Changes in the fair value of derivatives are recorded each
period in current earnings or other comprehensive income, depending on whether a
derivative is designated as part of a hedge transaction and, if it is, the type
of hedge transaction. The Company anticipates that, due to its limited use of
derivative instruments, the adoption of SFAS No. 133 will not have a significant
effect on the Company's results of operations or its financial position.
The Company believes that its existing cash and investments balance, together
with cash generated from operations, will be sufficient to meet the Company's
planned working capital and capital expenditure requirements through 1998,
including the Company's stock repurchase program and current and potential
business acquisitions.
10
<PAGE> 13
FORWARD-LOOKING STATEMENTS
Certain statements made in this report, as well as oral statements made by the
Company from time to time, which are prefaced with words such as "expects,"
"anticipates," "believes," and similar words and other statements of similar
sense, are forward-looking statements. These statements are based on the
Company's current expectations and estimates as to prospective events and
circumstances, which may or may not be in the Company's control and as to which
there can be no firm assurances given. These forward-looking statements, like
any other forward-looking statements, involve risks and uncertainties that could
cause actual results to differ materially from those projected or anticipated.
Such risks and uncertainties include (1) the loss of, or a significant
curtailment of purchases by, any one or more principal customers; (2) the
cyclicality of the semiconductor and electronics industries; (3) the Company's
continued ability to achieve significant international revenue; (4) capital
spending trends by manufacturing companies; (5) inability to protect the
Company's proprietary technology and intellectual property; (6) inability to
attract or retain skilled employees; (7) technological obsolescence of current
products and the inability to develop new products; (8) inability to respond to
competitive technology and pricing pressures; and (9) reliance upon certain sole
source suppliers to manufacture or deliver critical components of the Company's
products. The foregoing list should not be construed as exhaustive and the
Company disclaims any obligation to subsequently revise forward-looking
statements to reflect events or circumstances after the date of such statements
or to reflect the occurrence of anticipated or unanticipated events. Further
discussions of risk factors are also available in the Company's registration
statements filed with the Securities and Exchange Commission. The Company wishes
to caution readers not to place undue reliance upon any such forward-looking
statements, which speak only as of the date made.
11
<PAGE> 14
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At a Special Meeting of the Stockholders of Cognex Corporation in lieu
of the 1998 Annual Meeting held on April 21, 1998, the Stockholders
elected Robert J. Shillman and Anthony Sun to serve as Directors for a
term of three years. Jerald Fishman, William Krivsky, and Reuben
Wasserman continued as Directors after the meeting. In addition, the
Stockholders approved the Cognex Corporation 1998 Non-Employee
Director Stock Option Plan and the Cognex Corporation 1998 Stock
Incentive Plan. The 37,011,878 shares represented at the meeting voted
as follows. The election of Robert J. Shillman as Director: 36,569,491
votes for and 442,387 votes withheld; the election of Anthony Sun as
Director: 36,538,318 votes for and 473,560 votes withheld; the
approval of the Cognex Corporation 1998 Non-Employee Director Stock
Option Plan: 23,138,870 votes for, 7,264,763 votes against, 136,856
votes abstained, and 6,471,389 no votes; the approval of the Cognex
Corporation 1998 Stock Incentive Plan: 21,065,041 votes for, 9,355,889
votes against, 119,559 votes abstained, and 6,471,389 no votes.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule (electronic filing only)
(b) Reports on Form 8-K
None
12
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: August 7, 1998 COGNEX CORPORATION
/s/ John J. Rogers, Jr.
-----------------------------------------
John J. Rogers, Jr.
Executive Vice President, Chief
Financial Officer, and Treasurer
(duly authorized officer, principal
financial and accounting officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF COGNEX CORPORATION FOR THE QUARTER ENDED
JULY 5, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUL-05-1998
<CASH> 20,725,000
<SECURITIES> 139,864,000
<RECEIVABLES> 29,836,000
<ALLOWANCES> 2,270,000
<INVENTORY> 9,704,000
<CURRENT-ASSETS> 210,825,000
<PP&E> 50,329,000
<DEPRECIATION> 15,755,000
<TOTAL-ASSETS> 251,607,000
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0
0
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</TABLE>
