<PAGE> 1
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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 October 3, 1999 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
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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 October 31, 1999, there were 41,436,650 shares of Common Stock, $.002
par value, of the registrant outstanding.
Total number of pages: 12
Exhibit index is located on page 11
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<PAGE> 2
INDEX
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income for the three and nine
months ended October 3, 1999 and October 4, 1998
Consolidated Balance Sheets at October 3, 1999 and
December 31, 1998
Consolidated Statement of Stockholders' Equity for the nine
months ended October 3, 1999
Consolidated Statements of Cash Flows for the nine months
ended October 3, 1999 and October 4, 1998
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
COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
OCTOBER 3, OCTOBER 4, OCTOBER 3, OCTOBER 4,
1999 1998 1999 1998
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenue .............................................................. $41,046 $ 24,659 $103,802 $96,751
Cost of revenue ...................................................... 11,949 8,277 31,619 28,678
------- -------- -------- -------
Gross margin ......................................................... 29,097 16,382 72,183 68,073
Research, development, and engineering expenses ...................... 7,584 6,440 20,718 18,695
Selling, general, and administrative expenses ........................ 10,934 8,937 31,007 28,199
Non-recurring charges ................................................ 2,100 400 2,100
------- -------- -------- -------
Income (loss) from operations ........................................ 10,579 (1,095) 20,058 19,079
Investment income .................................................... 1,667 1,598 4,745 5,117
Other income ......................................................... 206 148 557 484
------- -------- -------- -------
Income before provision for income taxes ............................. 12,452 651 25,360 24,680
Income tax provision (benefit) ....................................... 3,486 (300) 7,101 6,670
------- -------- -------- -------
Net income ........................................................... $ 8,966 $ 951 $ 18,259 $18,010
======= ======== ======== =======
Net income per share:
Basic ............................................................ $ .22 $ .02 $ .45 $ .44
======= ======== ======== =======
Diluted .......................................................... $ 20 $ .02 $ .42 $ .42
======= ======== ======== =======
Weighted-average common and common equivalent shares outstanding:
Basic ............................................................ 41,146 40,559 40,727 41,269
======= ======== ======== =======
Diluted .......................................................... 44,348 42,916 43,868 43,052
======= ======== ======== =======
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
1
<PAGE> 4
COGNEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<TABLE>
<CAPTION>
OCTOBER 3, DECEMBER 31,
1999 1998
---------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and investments ............................................... $ 200,662 $ 158,458
Accounts receivable, less reserves of $2,526 and $2,583 in 1999 and
1998, respectively .............................................. 23,542 20,987
Revenue in excess of billings ...................................... 1,673 4,945
Inventories ........................................................ 11,377 10,812
Deferred income taxes .............................................. 3,936 3,936
Prepaid expenses and other ......................................... 7,799 8,141
--------- ---------
Total current assets ........................................... 248,989 207,279
Property, plant, and equipment, net ..................................... 32,264 34,255
Deferred income taxes ................................................... 2,327 2,237
Other assets ............................................................ 3,668 4,157
--------- ---------
$ 287,248 $ 247,928
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................................... $ 5,328 $ 2,488
Accrued expenses ................................................... 16,219 11,653
Accrued income taxes ............................................... 3,170 916
Customer deposits .................................................. 3,893 4,894
Deferred revenue ................................................... 3,903 2,965
--------- ---------
Total current liabilities ...................................... 32,513 22,916
--------- ---------
Other liabilities ....................................................... 1,833 2,137
Stockholders' equity:
Common stock, $.002 par value -
Authorized: 120,000,000 shares, issued: 43,729,046 and 42,453,980
shares in 1999 and 1998, respectively ........................... 87 85
Additional paid-in capital ......................................... 110,668 97,531
Treasury stock, at cost, 2,380,006 and 2,307,140 shares in 1999 and
1998, respectively .............................................. (43,519) (41,353)
Retained earnings .................................................. 184,830 166,571
Accumulated other comprehensive income ............................. 836 41
--------- ---------
Total stockholders' equity ..................................... 252,902 222,875
--------- ---------
$ 287,248 $ 247,928
========= =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
2
<PAGE> 5
COGNEX CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TREASURY STOCK
--------------------- PAID-IN --------------------
SHARES PAR VALUE CAPITAL SHARES COST
---------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1998 42,453,980 $85 $ 97,531 2,307,140 $(41,353)
Issuance of common stock under stock
option and stock purchase plans 1,275,066 2 10,743
Tax benefit from exercise of
stock options 2,394
Common stock received for payment 72,866 (2,166)
of stock option exercises
Comprehensive income:
Net income
Other comprehensive income:
Unrealized gain on investment
Translation adjustment
Other comprehensive income
Comprehensive income
---------- --- -------- --------- --------
Balance at October 3, 1999 (unaudited) 43,729,046 $87 $110,668 2,380,006 $(43,519)
========== === ======== ========= ========
<CAPTION>
ACCUMULATED
OTHER TOTAL
RETAINED COMPREHENSIVE COMPREHENSIVE STOCKHOLDERS'
EARNINGS INCOME INCOME EQUITY
-------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Balance at December 31, 1998 $166,571 $ 41 $222,875
Issuance of common stock under stock
option and stock purchase plans 10,745
Tax benefit from exercise of
stock options 2,394
Common stock received for payment (2,166)
of stock option exercises
Comprehensive income:
Net income 18,259 $18,259 18,259
Other comprehensive income:
Unrealized gain on investment 750 750 750
Translation adjustment 45 45 45
-------
Comprehensive income $19,054
-------- ---- ======= --------
Balance at October 3, 1999 (unaudited) $184,830 $836 $252,902
======== ==== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
3
<PAGE> 6
COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
OCTOBER 3, OCTOBER 4,
1999 1998
---------- ----------
(UNAUDITED)
<S> <C> <C>
Cash flows from operating activities:
Net income .......................................................... $ 18,259 $ 18,010
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization ..................................... 6,996 6,599
Tax benefit from exercise of stock options ........................ 2,394 1,469
Charge for acquired in-process technology ......................... 2,100
Deferred income tax benefit ....................................... (90) (731)
Change in other current assets and current liabilities ............ 10,757 (4,914)
Other ............................................................. 514 77
--------- ---------
Net cash provided by operating activities ........................... 38,830 22,610
--------- ---------
Cash flows from investing activities:
Purchase of investments ............................................. (79,542) (54,525)
Maturity of investments ............................................. 45,021 63,075
Purchase of property, plant, and equipment .......................... (2,299) (6,403)
Cash paid for technology acquisitions and equity investments ........ (1,624) (2,864)
--------- ---------
Net cash used in investing activities ............................... (38,444) (717)
--------- ---------
Cash flows from financing activities:
Issuance of common stock under stock option and stock purchase plans 8,579 2,210
Repurchase of common stock .......................................... (38,253)
--------- ---------
Net cash provided by (used in) financing activities ................. 8,579 (36,043)
--------- ---------
Effect of exchange rate changes on cash .................................. (738) 302
--------- ---------
Net increase (decrease) in cash and cash equivalents ..................... 8,227 (13,848)
Cash and cash equivalents at beginning of period ......................... 27,807 38,198
--------- ---------
Cash and cash equivalents at end of period ............................... 36,034 24,350
Investments .............................................................. 164,628 130,031
--------- ---------
Cash and investments ..................................................... $ 200,662 $ 154,381
========= =========
</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, 1998.
In the opinion of the management of Cognex Corporation, the accompanying
consolidated unaudited financial statements contain all adjustments
necessary to present fairly the Company's financial position at October 3,
1999, and the results of operations for the three and nine months ended
October 3, 1999, and changes in stockholders' equity and cash flows for the
periods presented.
The results disclosed in the Consolidated Statements of Income for the
three and nine months ended October 3, 1999 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) OCTOBER 3, DECEMBER 31,
1999 1998
---------- ------------
(UNAUDITED)
<S> <C> <C>
Raw materials .................................. $ 6,404 $ 6,195
Work-in-process ................................ 1,766 1,262
Finished goods ................................. 3,207 3,355
------- -------
$11,377 $10,812
======= =======
</TABLE>
<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 NINE MONTHS ENDED
OCTOBER 3, OCTOBER 4, OCTOBER 3, OCTOBER 4,
1999 1998 1999 1998
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net income ............................................. $ 8,966 $ 951 $18,259 $18,010
======= ======= ======= =======
Basic:
- ------
Weighted-average common shares outstanding ......... 41,146 40,559 40,727 41,269
======= ======= ======= =======
Net income per common share ........................ $ .22 $ .02 $ .45 $ .44
======= ======= ======= =======
Diluted:
- --------
Weighted-average common shares outstanding ......... 41,146 40,559 40,727 41,269
Effect of dilutive securities:
Stock options ................................... 3,202 2,357 3,141 1,783
------- ------- ------- -------
Weighted-average common and common equivalent shares
outstanding ..................................... 44,348 42,916 43,868 43,052
======= ======= ======= =======
Net income per common and common equivalent share .. $ .20 $ .02 $ .42 $ .42
======= ======= ======= =======
</TABLE>
NON - RECURRING CHARGES
During the second quarter of 1999, the Company recorded a pre-tax restructuring
charge of $400,000, primarily for severance, lease termination costs, and losses
on equipment disposals associated with the closure of its Montreal, Canada
manufacturing facility. This action was taken to centralize operations related
to the Company's surface inspection product line at its Alameda, California
facility. Cash outlays of approximately $63,000 were paid during the third
quarter of 1999 related to severance associated with the closure. The remaining
cash outlays related to this plan are anticipated to be paid through 2000, with
the majority of the payments to be made during the fourth quarter of 1999.
During the third quarter of 1998, the Company acquired certain technology of
Rockwell Automation's Allen-Bradley machine vision business. The acquired
technology related to certain products under development. The technology was
valued using a risk-adjusted cash flow model, under which future cash flows were
discounted taking into account risks related to existing markets, the
technology's life expectancy, future target markets and potential changes
thereto, and the competitive outlook for the technology. This analysis resulted
in an allocation of $2,100,000 to in-process technology which had not reached
technological feasibility and had no alternative future use, and accordingly,
was expensed immediately.
6
<PAGE> 9
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
Revenue for the three-month period ended October 3, 1999 increased 66% to
$41,046,000 from $24,659,000 for the same period in 1998. The increase in
revenue of $16,387,000 is due primarily to a higher volume of systems sold to
the Company's core Original Equipment Manufacturer (OEM) customers in the
semiconductor and electronics industries. Sales to OEM customers increased
$13,221,000, or 99%, over the third quarter of the prior year and represented
65% of revenue for the quarter in 1999 compared to 54% in 1998. Sales to
end-user customers increased $3,166,000, or 28%, from the third quarter of 1998
due primarily to increased volume from customers in general manufacturing
industries. While revenue increased in all of the Company's worldwide regions
from the third quarter of 1998, the most significant increase was in Japan,
where most of the Company's core OEM customers are located.
Revenue for the nine-month period ended October 3, 1999 increased 7% to
$103,802,000 from $96,751,000 for the same period in 1998. The increase in
revenue of $7,051,000 is attributable to increased volume from both OEM and
end-user customers. Sales to OEM customers increased $3,225,000, or 6%, over the
prior year and sales to end-user customers increased $3,826,000, or 10%, from
the same period in 1998. During 1999, the Company experienced an increase in
demand as its customers recovered from the 1998 slowdown in capital spending by
manufacturers in the semiconductor and electronics industries. Due to this
increased order rate, the Company expects revenue to continue to increase
sequentially and year-over-year for the remainder of 1999.
Gross margin as a percentage of revenue for the three-month and nine-month
periods ended October 3, 1999 was 71% and 70%, respectively, compared to 66% and
70% for the same periods in 1998. The increase in the gross margin percentage
for the three-month period is primarily because the third quarter of 1999
included a greater percentage of revenue from modular vision systems, which have
higher gross margins than surface inspection systems. Gross margin as a
percentage of revenue is expected to remain relatively consistent for the fourth
quarter of 1999.
Research, development, and engineering expenses for the three-month and
nine-month periods ended October 3, 1999 were $7,584,000 and $20,718,000,
respectively, compared to $6,440,000 and $18,695,000 for the same periods in
1998, representing an 18% increase for the three-month period and an 11%
increase for the nine-month period. The increase in aggregate expenses is due
primarily to higher personnel-related costs to support the Company's continued
investment in the development of new and existing products. Expenses as a
percentage of revenue were 18% and 20% for the three-month and nine-month
periods in 1999, compared to 26% and 19% for the same periods in 1998. The
decrease in expenses as a percentage of revenue for the three-month period is
due to the higher revenue base in 1999. The increase in expenses as a percentage
of revenue for the nine-month period is due to higher aggregate expenses in 1999
with only a 7% increase in revenue year over year. The Company anticipates that
aggregate expenses will increase moderately for the remainder of 1999 due to
planned investment in continuing product development. However, the level of
expenses as a percentage of revenue for the fourth quarter of 1999 is expected
to decline, as revenue is expected to increase at a greater rate than aggregate
expenses.
7
<PAGE> 10
RESULTS OF OPERATIONS, CONTINUED
Selling, general, and administrative expenses for the three-month and nine-month
periods ended October 3, 1999 were $10,934,000 and $31,007,000, respectively,
compared to $8,937,000 and $28,199,000 for the same periods in 1998,
representing a 22% increase for the three-month period and a 10% increase for
the nine-month period. The increase in aggregate expenses is due primarily to
higher personnel-related costs, including sales commissions and company bonuses,
associated with the increase in customer demand. Expenses as a percentage of
revenue were 27% and 30% for the three- month and nine-month periods in 1999,
compared to 36% and 29% for the same periods in 1998. The decrease in expenses
as a percentage of revenue for the three-month period is due to the higher
revenue base in 1999. The increase in expenses as a percentage of revenue for
the nine-month period is due to higher aggregate expenses in 1999 with only a 7%
increase in revenue year over year. The Company anticipates that aggregate
expenses will increase moderately for the remainder of 1999 due to additional
resources required to support the higher level of demand. However, the level of
expenses as a percentage of revenue for the fourth quarter of 1999 is expected
to decline, as revenue is expected to increase at a greater rate than aggregate
expenses.
During the second quarter of 1999, the Company recorded a pre-tax restructuring
charge of $400,000, primarily for severance, lease termination costs, and losses
on equipment disposals associated with the closure of its Montreal, Canada
manufacturing facility. This action was taken to centralize operations related
to the Company's surface inspection product line at its Alameda, California
facility. Cash outlays of approximately $63,000 were paid during the third
quarter of 1999 related to severance expenses associated with the closure. The
remaining cash outlays related to this plan are anticipated to be paid through
2000, with the majority of the payments to be made during the fourth quarter of
1999.
Investment income for the three-month and nine-month periods ended October 3,
1999 was $1,667,000 and $4,745,000, respectively, compared to $1,598,000 and
$5,117,000 for the same periods in 1998, representing a 4% increase for the
three-month period and a 7% decrease for the nine-month period. The increase in
investment income for the three-month period is due primarily to a higher
average invested cash balance in the third quarter of 1999. The decrease in
investment income for the nine-month period is due primarily to a lower interest
rate environment.
The Company's effective tax rate was 28% for the nine-month period ended October
3, 1999 compared to 27% for the same period in 1998. The increase in the
effective tax rate is primarily attributable to the higher operating income in
1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash requirements during the nine-month period ended October 3,
1999 were met through cash generated from operations. Cash and investments
increased $42,204,000 from December 31, 1998 primarily as a result of
$38,830,000 of cash generated from operations and $8,579,000 of proceeds from
the issuance of common stock under stock option and stock purchase plans.
Capital expenditures for the nine-month period were $2,299,000 and consisted
primarily of expenditures for computer hardware and software.
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 2000.
8
<PAGE> 11
YEAR 2000 UPDATE
The Company is aware of the potential for industry-wide business disruption
which could occur due to problems related to the "Year 2000" issue. Management
believes that it has a prudent plan in place to address this issue within the
Company and its supply chain. The components of this plan include: an assessment
of internal systems for modification and/or replacement; communication with
external vendors to determine their state of readiness to maintain an
uninterrupted supply of goods and services to the Company; and an evaluation of
products sold by the Company to customers as to the ability of the products to
work properly after the turn of the century.
INTERNAL SYSTEMS
The Company has identified five internal systems that are used for business
transaction processing as being critical to the uninterrupted operation of the
business. All five systems are presently Year 2000 compliant.
VENDORS
The Company has sent letters to over 250 vendors outlining its approach towards
the Year 2000 issue and asking for either their certification that their product
is Year 2000 compliant or their commitment to resolve any issues they may have.
The Company has identified vendors it views as critical to its business.
Management has defined a critical vendor as one whose inability to continue to
provide goods and services would have a serious adverse impact on the Company's
ability to produce, deliver, and collect payment for its product.
The Company has received responses from all critical vendors outlining their
plans for Year 2000 compliance. The Company does not intend to verify
representations made by vendors regarding their Year 2000 compliance status. It
may never be able to know with certainty whether certain critical vendors are
compliant. Failure of critical vendors to make their computer systems Year 2000
compliant could result in delaying deliveries of products and services to the
Company. If such delays are extensive, they could have a material adverse effect
on the Company's business.
PRODUCTS
Testing of current releases of Cognex products is complete and has confirmed
that Cognex's core vision functionality is not date-sensitive or dependent on
date fields and is therefore Year 2000 compliant. The Company's Year 2000
product compliance verification methodology consisted of a review of the source
code and functional testing of current releases of Cognex products, which are
believed to be representative of prior releases as well. Based on similarities
in the source code for current and prior releases of Cognex products and the
fact that Cognex's core vision functionality is not date-sensitive or dependent
on date fields, the Company believes that prior releases of its products are
Year 2000 compliant. The Company does not intend to conduct functionality
testing of prior releases of Cognex products. Year 2000 compliance verification
included examination of the 1999/2000 date rollover, date-sensitive
functionality with the Year 2000, and leap year compliance.
COSTS
Costs incurred in the Company's Year 2000 compliance effort are expensed as
incurred and funded with cash generated from operations. These costs are
included in the normal, recurring costs incurred for product development and
systems maintenance and are not material to the Company's results of operations.
9
<PAGE> 12
YEAR 2000 UPDATE, CONTINUED
RISKS
Although the Company believes it is taking prudent action related to the
identification and resolution of issues related to the Year 2000, its assessment
is still in progress. The failure to correct a material Year 2000 problem could
result in an interruption in, or a failure of, certain normal business
activities. Such failures could materially and adversely affect the Company's
results of operations, liquidity, and financial condition. Due to the general
uncertainty inherent in the Year 2000 issue, resulting in part from the
uncertainty of the Year 2000 readiness of third-party vendors, the Company is
unable to determine at this time whether the consequences of Year 2000 failures
will have a material impact on the Company's results of operations, liquidity,
or financial position. The Year 2000 compliance project is expected to reduce,
but not eliminate, the Company's level of uncertainty about the Year 2000 issue
and, in particular, about the Year 2000 compliance and readiness of its critical
vendors. The Company believes that, with the completion of the Year 2000
compliance project as scheduled, the possibility of significant interruptions to
normal operations should be reduced.
CONTINGENCY PLAN
As part of its contingency planning effort, the Company has identified its core
business processes that are vital to the Company such that a Year 2000 failure
would have a significant impact on the Company's ability to conduct business.
The Company has also identified measures within its control to minimize the
impact of a Year 2000 failure. A contingency plan has been finalized that
outlines the actions to be taken in the event of a Year 2000 failure to enable
the Company to resume operations. The components of this plan include utilizing
manual records and processes, securing critical materials for January product
shipments in December, and securing alternative vendors and backup systems.
FORWARD-LOOKING STATEMENTS
Certain statements made in this report (including statements regarding the Year
2000 issue), as well as oral statements made by the Company from time to time,
which are prefaced with words such as "expects," "anticipates," "believes,"
"projects," "intends," "plans," 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.
10
<PAGE> 13
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
None
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
11
<PAGE> 14
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: November 12, 1999 COGNEX CORPORATION
/s/ Richard A. Morin
--------------------------------------------
Richard A. Morin
Executive Vice President of Finance,
Chief Financial Officer, and Treasurer
(duly authorized officer, principal financial
and accounting officer)
12
<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
OCTOBER 3, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<CURRENCY> US$
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JUL-04-1999
<PERIOD-END> OCT-03-1999
<EXCHANGE-RATE> 1
<CASH> 36,034,000
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0
0
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</TABLE>
