COGNEX CORPORATION
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following unaudited pro forma consolidated financial statements of Cognex Corporation (the "Company") have been prepared to reflect the sale of assets related to the Company's Surface Inspection Systems Division ("SISD") to AMETEK, Inc. ("Asset Sale"), as further described in Item 2.01 of the Company's Current Report on Form 8-K filed herewith. The unaudited pro forma consolidated financial statements give effect to the disposition of SISD to be accounted for as a discontinued operation. The unaudited pro forma consolidated Balance Sheet has been prepared as of April 5, 2015 and gives effect to the disposition of SISD as if the Asset Sale occurred on April 5, 2015. The unaudited pro forma consolidated Statements of Operations have been prepared for the three-month period ended April 5, 2015 and for the twelve-month periods ended December 31, 2014, December 31, 2013, and December 31, 2012. The unaudited pro forma consolidated Statements of Operations give effect to the disposition of SISD as if the Asset Sale occurred on January 1, 2012.
The unaudited pro forma consolidated financial statements presented are based on the assumptions and adjustments described in the accompanying notes and reflect the estimated net proceeds of the Asset Sale as an increase to cash and cash equivalents. The actual effect of the Asset Sale on the business, financial condition, and results of operations of the Company, due to this and other factors, including those set forth in the Company's most recent Annual Report on Form 10-K, could differ materially from the pro forma adjustments described herein. However, management believes that the assumptions used and the adjustments made in this presentation are reasonable under the circumstances and information available at this time.
The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the Asset Sale been consummated as of the dates indicated or of the results that may be obtained in the future. The Company cautions readers not to place undue reliance upon these statements, which speak only as of the date made, and the Company makes no representations regarding the information set forth below or its ultimate performance compared thereto. The Company disclaims any obligation to subsequently revise forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such statements are made. These unaudited pro forma consolidated financial statements and the accompanying notes should be read together with the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and the Company's Quarterly Report on Form 10-Q for the three-month period ended April 5, 2015.
COGNEX CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
|
| | | | | | | | | | | | | | | |
| | Three-months Ended April 5, 2015 |
| | Cognex Corporation | | Disposed Business (a) | | Pro Forma Adjustments | | Pro Forma Cognex Corporation |
| | | | |
| Revenue | | | | | | | |
| Product | $ | 105,775 |
| | $ | (8,281 | ) | | $ | — |
| | $ | 97,494 |
|
| Service | 7,659 |
| | (3,780 | ) | | — |
| | 3,879 |
|
| | 113,434 |
| | (12,061 | ) | | — |
| | 101,373 |
|
| Cost of revenue | | | | | | | |
| Product | 23,634 |
| | (3,575 | ) | | 43 |
| (c) | 20,102 |
|
| Service | 4,320 |
| | (2,087 | ) | | 9 |
| (c) | 2,242 |
|
| | 27,954 |
| | (5,662 | ) | | 52 |
| | 22,344 |
|
| Gross margin | | | | | | | |
| Product | 82,141 |
| | (4,706 | ) | | (43 | ) | | 77,392 |
|
| Service | 3,339 |
| | (1,693 | ) | | (9 | ) | | 1,637 |
|
| | 85,480 |
| | (6,399 | ) | | (52 | ) | | 79,029 |
|
| Research, development, and engineering expenses | 18,076 |
| | (1,179 | ) | | 89 |
| (c) | 16,986 |
|
| Selling, general, and administrative expenses | 43,487 |
| | (3,607 | ) | | 53 |
| (c) | 39,933 |
|
| Operating income | 23,917 |
| | (1,613 | ) | | (194 | ) | | 22,110 |
|
| Nonoperating income | 945 |
| | — |
| | — |
| | 945 |
|
| Income before income tax expense | 24,862 |
| | (1,613 | ) | | (194 | ) | | 23,055 |
|
| Income tax expense | 4,360 |
| | (536 | ) | (b) | (73 | ) | (b) | 3,751 |
|
| Net income | $ | 20,502 |
| | $ | (1,077 | ) | | $ | (121 | ) | | $ | 19,304 |
|
| | | | | | | | |
| Earnings per weighted-average common and common-equivalent share: |
| Basic | $ | 0.24 |
| |
|
| |
|
| | $ | 0.22 |
|
| Diluted | $ | 0.23 |
| |
|
| |
|
| | $ | 0.22 |
|
| | | | | | | | |
| Weighted-average common and common-equivalent shares outstanding: |
| Basic | 86,764 |
| | | | | | 86,764 |
|
| Diluted | 88,749 |
| | | | | | 88,749 |
|
The accompanying notes are an integral part of these pro forma consolidated financial statements.
COGNEX CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
|
| | | | | | | | | | | | | | | |
| | Twelve-months Ended December 31, 2014 |
| | Cognex Corporation | | Disposed Business (a) | | Pro Forma Adjustments | | Pro Forma Cognex Corporation |
| | | | |
| Revenue | | | | | | | |
| Product | $ | 451,066 |
| | $ | (42,049 | ) | | $ | — |
| | $ | 409,017 |
|
| Service | 35,204 |
| | (17,772 | ) | | — |
| | 17,432 |
|
| | 486,270 |
| | (59,821 | ) | | — |
| | 426,449 |
|
| Cost of revenue | | | | | | | |
| Product | 101,448 |
| | (18,367 | ) | | 185 |
| (c) | 83,266 |
|
| Service | 19,572 |
| | (8,814 | ) | | 43 |
| (c) | 10,801 |
|
| | 121,020 |
| | (27,181 | ) | | 228 |
| | 94,067 |
|
| Gross margin | | | | | | | |
| Product | 349,618 |
| | (23,682 | ) | | (185 | ) | | 325,751 |
|
| Service | 15,632 |
| | (8,958 | ) | | (43 | ) | | 6,631 |
|
| | 365,250 |
| | (32,640 | ) | | (228 | ) | | 332,382 |
|
| Research, development, and engineering expenses | 59,920 |
| | (4,479 | ) | | 390 |
| (c) | 55,831 |
|
| Selling, general, and administrative expenses | 161,667 |
| | (13,662 | ) | | 694 |
| (c) | 148,699 |
|
| Operating income | 143,663 |
| | (14,499 | ) | | (1,312 | ) | | 127,852 |
|
| Nonoperating income | 3,734 |
| | — |
| | — |
| | 3,734 |
|
| Income before income tax expense | 147,397 |
| | (14,499 | ) | | (1,312 | ) | | 131,586 |
|
| Income tax expense | 25,912 |
| | (4,757 | ) | (b) | (492 | ) | (b) | 20,663 |
|
| Net income | $ | 121,485 |
| | $ | (9,742 | ) | | $ | (820 | ) | | $ | 110,923 |
|
| | | | | | | | |
| Earnings per weighted-average common and common-equivalent share: |
| Basic | $ | 1.40 |
| |
|
| |
|
| | $ | 1.28 |
|
| Diluted | $ | 1.36 |
| |
|
| |
|
| | $ | 1.25 |
|
| | | | | | | | |
| Weighted-average common and common-equivalent shares outstanding: |
| Basic | 86,858 |
| | | | | | 86,858 |
|
| Diluted | 89,071 |
| | | | | | 89,071 |
|
The accompanying notes are an integral part of these pro forma consolidated financial statements.
COGNEX CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
|
| | | | | | | | | | | | | | | |
| | Twelve-months Ended December 31, 2013 |
| | Cognex Corporation | | Disposed Business (a) | | Pro Forma Adjustments | | Pro Forma Cognex Corporation |
| | | | |
| Revenue | | | | | | | |
| Product | $ | 326,786 |
| | $ | (28,600 | ) | | $ | — |
| | $ | 298,186 |
|
| Service | 27,100 |
| | (17,635 | ) | | — |
| | 9,465 |
|
| | 353,886 |
| | (46,235 | ) | | — |
| | 307,651 |
|
| Cost of revenue | | | | | | | |
| Product | 71,893 |
| | (13,196 | ) | | 168 |
| (c) | 58,865 |
|
| Service | 12,187 |
| | (8,196 | ) | | 33 |
| (c) | 4,024 |
|
| | 84,080 |
| | (21,392 | ) | | 201 |
| | 62,889 |
|
| Gross margin | | | | | | | |
| Product | 254,893 |
| | (15,404 | ) | | (168 | ) | | 239,321 |
|
| Service | 14,913 |
| | (9,439 | ) | | (33 | ) | | 5,441 |
|
| | 269,806 |
| | (24,843 | ) | | (201 | ) | | 244,762 |
|
| Research, development, and engineering expenses | 48,087 |
| | (4,114 | ) | | 342 |
| (c) | 44,315 |
|
| Selling, general, and administrative expenses | 135,351 |
| | (12,576 | ) | | 734 |
| (c) | 123,509 |
|
| Operating income | 86,368 |
| | (8,153 | ) | | (1,277 | ) | | 76,938 |
|
| Nonoperating income | 1,518 |
| | — |
| | — |
| | 1,518 |
|
| Income before income tax expense | 87,886 |
| | (8,153 | ) | | (1,277 | ) | | 78,456 |
|
| Income tax expense | 14,313 |
| | (2,561 | ) | (b) | (479 | ) | (b) | 11,273 |
|
| Net income | $ | 73,573 |
| | $ | (5,592 | ) | | $ | (798 | ) | | $ | 67,183 |
|
| | | | | | | | |
| Earnings per weighted-average common and common-equivalent share: |
| Basic | $ | 0.85 |
| |
|
| |
|
| | $ | 0.77 |
|
| Diluted | $ | 0.83 |
| |
|
| |
|
| | $ | 0.76 |
|
| | | | | | | | |
| Weighted-average common and common-equivalent shares outstanding: |
| Basic | 86,946 |
| | | | | | 86,946 |
|
| Diluted | 88,901 |
| | | | | | 88,901 |
|
The accompanying notes are an integral part of these pro forma consolidated financial statements.
COGNEX CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
|
| | | | | | | | | | | | | | | |
| | Twelve-months Ended December 31, 2012 |
| | Cognex Corporation | | Disposed Business (a) | | Pro Forma Adjustments | | Pro Forma Cognex Corporation |
| | | | |
| Revenue | | | | | | | |
| Product | $ | 295,588 |
| | $ | (32,280 | ) | | $ | — |
| | $ | 263,308 |
|
| Service | 28,691 |
| | (18,303 | ) | | — |
| | 10,388 |
|
| | 324,279 |
| | (50,583 | ) | | — |
| | 273,696 |
|
| Cost of revenue | | | | | | | |
| Product | 65,432 |
| | (14,613 | ) | | 151 |
| (c) | 50,970 |
|
| Service | 14,063 |
| | (8,900 | ) | | 28 |
| (c) | 5,191 |
|
| | 79,495 |
| | (23,513 | ) | | 179 |
| | 56,161 |
|
| Gross margin | | | | | | | |
| Product | 230,156 |
| | (17,667 | ) | | (151 | ) | | 212,338 |
|
| Service | 14,628 |
| | (9,403 | ) | | (28 | ) | | 5,197 |
|
| | 244,784 |
| | (27,070 | ) | | (179 | ) | | 217,535 |
|
| Research, development, and engineering expenses | 41,549 |
| | (3,876 | ) | | 302 |
| (c) | 37,975 |
|
| Selling, general, and administrative expenses | 119,828 |
| | (11,813 | ) | | 655 |
| (c) | 108,670 |
|
| Operating income | 83,407 |
| | (11,381 | ) | | (1,136 | ) | | 70,890 |
|
| Nonoperating income | 3,223 |
| | — |
| | — |
| | 3,223 |
|
| Income before income tax expense | 86,630 |
| | (11,381 | ) | | (1,136 | ) | | 74,113 |
|
| Income tax expense | 18,532 |
| | (3,720 | ) | (b) | (426 | ) | (b) | 14,386 |
|
| Net income | $ | 68,098 |
| | $ | (7,661 | ) | | $ | (710 | ) | | $ | 59,727 |
|
| | | | | | | | |
| Earnings per weighted-average common and common-equivalent share: |
| Basic | $ | 0.79 |
| |
|
| |
|
| | $ | 0.70 |
|
| Diluted | $ | 0.78 |
| |
|
| |
|
| | $ | 0.68 |
|
| | | | | | | | |
| Weighted-average common and common-equivalent shares outstanding: |
| Basic | 85,666 |
| | | | | | 85,666 |
|
| Diluted | 87,280 |
| | | | | | 87,280 |
|
The accompanying notes are an integral part of these pro forma consolidated financial statements.
COGNEX CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
|
| | | | | | | | | | | |
| | April 5, 2015 |
| ASSETS | Cognex Corporation | | Disposed Business | | Pro Forma Cognex Corporation |
| Current assets: | | | | | |
| Cash and cash equivalents | $ | 36,047 |
| | $ | 149,992 |
| (e) | $ | 186,039 |
|
| Short-term investments | 142,343 |
| | | | 142,343 |
|
| Accounts receivable, net | 56,264 |
| | (10,706 | ) | (d) | 45,558 |
|
| Inventories | 48,458 |
| | (6,520 | ) | (d) | 41,938 |
|
| Deferred income taxes | 8,990 |
| | | | 8,990 |
|
| Prepaid expenses and other current assets | 17,857 |
| | (4,948 | ) | (d) | 12,909 |
|
| Total current assets | 309,959 |
| | 127,818 |
| | 437,777 |
|
| Long-term investments | 370,433 |
| | | | 370,433 |
|
| Property, plant, and equipment, net | 48,692 |
| | (1,750 | ) | (d) | 46,942 |
|
| Deferred income taxes | 16,349 |
| | | | 16,349 |
|
| Intangible assets, net | 9,606 |
| | (946 | ) | (d) | 8,660 |
|
| Goodwill | 81,689 |
| | (4,301 | ) | (d) | 77,388 |
|
| Other assets | 1,617 |
| | (31 | ) | (d) | 1,586 |
|
| | $ | 838,345 |
| | $ | 120,790 |
| | $ | 959,135 |
|
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | |
| Current liabilities: | | | | | |
| Accounts payable | $ | 13,295 |
| | $ | (1,083 | ) | (d) | $ | 12,212 |
|
| Accrued expenses | 32,240 |
| | (4,071 | ) | (d) | 28,169 |
|
| Accrued income taxes | 928 |
| | 49,852 |
| (f) | 50,780 |
|
| Deferred revenue | 20,447 |
| | (8,103 | ) | (d) | 12,344 |
|
| Total current liabilities | 66,910 |
| | 36,595 |
| | 103,505 |
|
| Reserve for income taxes | 4,372 |
| | — |
| | 4,372 |
|
| Commitments and contingencies | | | | | |
| Shareholders’ equity: | | | | | |
Common stock, $.002 par value –
Authorized: 140,000 shares, issued and outstanding: 87,128 | 174 |
| | — |
| | 174 |
|
| Additional paid-in capital | 272,070 |
| | 1,107 |
| (h) | 273,177 |
|
| Retained earnings | 544,448 |
| | 83,088 |
| (g) | 627,536 |
|
| Accumulated other comprehensive loss, net of tax | (49,629 | ) | | — |
| | (49,629 | ) |
| Total shareholders’ equity | 767,063 |
| | 84,195 |
| | 851,258 |
|
| | $ | 838,345 |
| | $ | 120,790 |
| | $ | 959,135 |
|
The accompanying notes are an integral part of these pro forma consolidated financial statements.
COGNEX CORPORATION
NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
| |
| a. | Represents the results of operations of SISD based upon U.S. GAAP for the period presented. |
| |
| b. | Represents the adjustment to the Company's income tax expense resulting from the pro forma impact of the disposition, but excludes any tax expense directly attributable to the gain on the transaction. |
| |
| c. | Represents the elimination of any non-recurring transaction costs incurred in connection with the Asset Sale. Additional professional fees will be incurred in connection with the closing of the Asset Sale. Also includes the reallocation of corporate overhead as if the division was sold as of the beginning of the period presented. |
| |
| d. | Represents the elimination of the major assets and liabilities transferred to AMETEK, Inc. in the Asset Sale as if the sale had occurred on April 5, 2015. |
| |
| e. | Includes the estimated net proceeds on the Asset Sale of $154.5 million, less $4.5 million of transaction costs. |
| |
| f. | Represents the estimated income taxes on the gain from the Asset Sale at the statutory rate. |
| |
| g. | Includes the estimated gain on the Asset Sale, which is reflective of the estimated closing balance sheet, transaction costs, and income taxes to be incurred on the transaction. |
| |
| h. | Represents stock-based compensation expense resulting from the accelerated vesting of stock option grants. |
