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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 4, 1995
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COGNEX CORPORATION
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(Exact name of registrant as specified in its charter)
Massachusetts 0-17869 04-2713778
- - ---------------------------- ----------- ------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
One Vision Drive
Natick, Massachusetts 01760-2059
(508) 650-3000
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(Address, including zip code, and telephone number,
including area code, of principal executive offices)
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INDEX
Item 2. Acquisition or Disposition of Assets
Information with respect to this item may be found in Item 5 "Other
Information" of Cognex Corporation's Quarterly Report on Form
10-Q for the quarter ended July 2, 1995. The purpose of filing this
Form 8-K is solely to supply financial statements in accordance with
Item 7(a)(4) of Form 8-K.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
Report of Independent Accountants
Statements of Income for the three months ended June 30, 1995
(unaudited) and the twelve months ended March 25, 1995
Balance Sheets as of June 30, 1995 (unaudited) and March 25, 1995
Statements of Stockholders' Equity for the three months ended
June 30, 1995 (unaudited) and the twelve months ended March 25,
1995
Statements of Cash Flows for the three months ended June 30,
1995 (unaudited) and the twelve months ended March 25, 1995
Notes to Financial Statements
(b) Pro Forma Financial Information
Introductory Information
Unaudited Pro Forma Statement of Income for the six months ended
July 2, 1995
Unaudited Pro Forma Statement of Income for the twelve months
ended December 31, 1994
Unaudited Pro Forma Balance Sheet as of July 2, 1995
Notes to Unaudited Pro Forma Financial Information
(c) Exhibits
Exhibit 2 - Stock Purchase Agreement dated as of July 21, 1995
among Acumen, Inc., the Shareholders of Acumen Inc., and
Cognex Corporation
Exhibit 27 - Financial Data Schedules (electronic filing only)
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COGNEX CORPORATION
FORM 8-K ITEM 7(A)
FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Cognex Corporation:
We have audited the accompanying balance sheet of Acumen, Incorporated as of
March 25, 1995 and the related statements of income, stockholders' equity and
cash flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and signficant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Acumen, Incorporated as of
March 25, 1995 and the results of its operations and its cash flows for the
year ended March 25, 1995, in conformity with generally accepted accounting
principles.
Boston, Massachusetts COOPERS & LYBRAND L. L. P.
September 29, 1995
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ACUMEN INCORPORATED
STATEMENTS OF INCOME
(In thousands, except per share amounts)
THREE MONTHS TWELVE MONTHS
ENDED ENDED
JUNE 30, MARCH 25,
1995 1995
------------ -------------
(UNAUDITED)
Revenue
Third party........................................ $ 1,189 $ 2,411
Related party...................................... 240 1,114
Cost of revenue
Third party........................................ 330 769
Related party...................................... 83 401
---------- ----------
Gross margin.......................................... 1,016 2,355
Research, development and engineering expenses........ 192 426
Selling, general and administrative expenses.......... 172 299
---------- -----------
Income from operations................................ 652 1,630
Other income.......................................... 6 1
---------- -----------
Income before provision for income taxes.............. 658 1,631
Provision for income taxes............................ 263 652
---------- -----------
Net income............................................ $ 395 $ 979
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Net income per share.................................. $ 4.82 $ 13.60
=========== ===========
Weighted average common shares outstanding............ 82 72
=========== ===========
The accompanying notes are an integral part of these financial statements.
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ACUMEN INCORPORATED
BALANCE SHEETS
(Dollars in thousands)
JUNE 30, MARCH 25,
1995 1995
----------- -----------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents...................... $ 736 $ 302
Accounts receivable
Third party.................................. 527 646
Related party................................ 473 233
Inventories.................................... 333 256
Prepaid expenses and other..................... 14 9
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Total current assets....................... 2,083 1,446
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Fixed assets, net................................. 42 45
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$ 2,125 $ 1,491
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
Third party.................................. $ 99 $ 98
Related party................................ 1 2
Accrued expenses............................... 72 97
Accrued income taxes........................... 358 94
----------- -----------
Total current liabilities.................. 530 291
----------- -----------
Stockholders' equity:
Common stock, no par value -
Authorized: 100,000 shares, issued and
outstanding: 81,984 at June 30, 1995 and
March 25, 1995...............................
Additional paid-in capital..................... 230 230
Retained earnings.............................. 1,365 970
----------- -----------
Total stockholders' equity................. 1,595 1,200
----------- -----------
$ 2,125 $ 1,491
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The accompanying notes are an integral part of these financial statements.
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ACUMEN INCORPORATED
STATEMENTS OF STOCKHOLDERS' EQUITY
(Dollars in thousands)
SHARES OF ADDITIONAL TOTAL
COMMON PAID-IN RETAINED STOCKHOLDERS'
STOCK CAPITAL EARNINGS EQUITY
--------- ---------- -------- ------------
Balance at March 31, 1994........................ 63,984 $230 $ (9) $ 221
Net income .................................. 979 979
Issuance of stock under stock option plan.... 18,000
------ ---- ------ ------
Balance at March 25, 1995........................ 81,984 230 970 1,200
Net income .................................. 395 395
------ ---- ------ ------
Balance at June 30, 1995 (unaudited)............. 81,984 $230 $1,365 $1,595
====== ==== ====== ======
The accompanying notes are an integral part of these financial statements.
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ACUMEN INCORPORATED
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
THREE MONTHS TWELVE MONTHS
ENDED ENDED
JUNE 30, MARCH 25,
1995 1995
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(UNAUDITED)
Cash flows from operating activities:
Net income....................................................... $ 395 $ 979
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation................................................... 6 17
Change in current assets and current liabilities:
Accounts receivable......................................... (121) (499)
Inventories................................................. (77) (96)
Prepaid expenses and other.................................. (5) (9)
Accounts payable............................................ 34
Accrued expenses............................................ (25) 59
Accrued income taxes........................................ 264 (78)
Customer deposits........................................... (164)
----- -----
Net cash provided by operating activities........................ 437 243
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Cash flows from investing activities:
Purchase of fixed assets......................................... (3) (37)
----- -----
Net cash used in investing activities............................ (3) (37)
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Net increase in cash and cash equivalents........................... 434 206
Cash and cash equivalents at beginning of period.................... 302 96
----- -----
Cash and cash equivalents at end of period.......................... $ 736 $ 302
===== =====
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes................................................... $ 592
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The accompanying notes are an integral part of these financial statements.
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ACUMEN INCORPORATED
NOTES TO FINANCIAL STATEMENTS
ORGANIZATION
- - ------------
Founded in 1991, Acumen, Inc. (the "Company") is a developer of machine vision
systems for semiconductor wafer identification. As of June 30, 1995, the
Company was majority owned by Accu-Fab Systems, Inc., a wholly-owned subsidiary
of ATS Automation Tooling Systems, Inc. See Related Party Transactions.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- - ------------------------------------------
The accompanying financial statements reflect the application of certain
accounting policies described in this and other notes to the financial
statements.
Basis of Presentation
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In the opinion of the management of the Company, the accompanying financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly the Company's financial position at
June 30, 1995 and March 25, 1995, and the results of its operations and
changes in stockholders' equity and cash flows for the three months ended
June 30, 1995 and the twelve months ended March 25, 1995.
The results disclosed in the Statement of Income for the three months ended
June 30, 1995 are not necessarily indicative of the results to be expected
for the full year.
The Company's fiscal year end is March 25, 1995, representing a 360-day
fiscal year.
Revenue Recognition
-------------------
Revenue from product sales and software licenses is recognized upon
shipment. Deferred revenue and customer deposits arise from billing in
advance of performance and are recognized as revenue during the period in
which performance occurs. Service and maintenance revenue is recognized as
earned.
Research and Development
------------------------
Research and development costs are charged to expense when incurred until
technological feasibility has been established for the product. Thereafter,
all software production costs are capitalized until the product is available
for general release to customers. The Company has not capitalized any
software costs to date.
Concentrations of Credit Risk
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A significant portion of the Company's sales and receivables are from
customers in the semiconductor industry. The Company performs ongoing credit
evaluations of its customers. To date, the Company has not experienced any
losses related to the collection of accounts receivable.
Cash Equivalents
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The Company considers all highly liquid investments purchased with an
original maturity of one year or less to be cash equivalents.
Inventories
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Inventories are stated at the lower of cost or market. Cost is determined
on the first-in, first-out basis.
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ACUMEN INCORPORATED
NOTES TO FINANCIAL STATEMENTS
Fixed Assets
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Fixed assets are stated at cost and depreciated using the straight-line
method over three years, the assets' estimated useful lives. Maintenance
and repairs are charged to expense when incurred; additions and improvements
are capitalized. Upon retirement or sale, the cost of the assets are
disposed of and the related accumulated depreciation is removed from the
accounts, with any resulting gain or loss included in the determination of
net income.
Income Taxes
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The Company accounts for income taxes according to Statement of Financial
Accounting Standard (SFAS) No. 109, "Accounting for Income Taxes." Under
the liability method specified in SFAS No. 109, a deferred tax asset or
liability is determined based on the differences between the financial
statement and tax basis of assets and liabilities as measured by the enacted
tax rates which will be in effect when these differences reverse. Tax
credits are recorded as a reduction in income taxes when utilized.
Net Income per Share
--------------------
Net income per share is calculated based on the weighted average number of
common and dilutive common equivalent shares outstanding during the period.
Primary and fully diluted earnings per share are not materially different
for each of the periods presented. Dilutive common equivalent shares
consist of stock options, calculated using the treasury stock method.
INVENTORIES
- - -----------
Inventories consist of the following:
JUNE 30, MARCH 25,
1995 1995
(In thousands) ----------- -----------
(UNAUDITED)
Raw materials............................... $ 91 $115
Work-in-process............................. 8 7
Finished goods.............................. 234 134
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$333 $256
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FIXED ASSETS
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Fixed assets consist of the following:
JUNE 30, MARCH 25,
(In thousands) 1995 1995
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(UNAUDITED)
Computer hardware and software.............. 88 85
Less: accumulated depreciation.............. (46) (40)
---- ----
$ 42 $ 45
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ACUMEN INCORPORATED
NOTES TO FINANCIAL STATEMENTS
ACCRUED EXPENSES
- - ----------------
Accrued expenses consist of the following:
JUNE 30, MARCH 25,
(In thousands) 1995 1995
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(UNAUDITED)
Payroll and related costs.............. $ 49 $ 52
Bonus and other........................ 23 45
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$ 72 $ 97
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INCOME TAXES
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The provision for income taxes in the accompanying Statements of Income
consists of the following:
JUNE 30, MARCH 25,
(In thousands) 1995 1995
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(UNAUDITED)
Current:
Federal................................. $ 224 $ 554
State................................... 39 98
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$ 263 $ 652
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A reconciliation of the provision for income taxes at the federal statutory
rate is as follows:
JUNE 30, MARCH 25,
(In thousands) 1995 1995
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(UNAUDITED)
Provision for income taxes at federal statutory rate.... 34% 34%
State income taxes, net of federal benefit.............. 6% 6%
--- ---
40% 40%
=== ===
At June 30, 1995 and March 25, 1995, the differences between the financial
statement and tax basis of assets and liabilities were immaterial, and
accordingly, the Company did not record a deferred tax asset or liability in
the accompanying balance sheets.
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ACUMEN INCORPORATED
NOTES TO FINANCIAL STATEMENTS
LEASES
- - ------
The Company conducts its operations in leased facilities. The lease agreement
expires on August 31, 1996 and is accounted for as an operating lease. Rent
expense approximated $12,873 for the three months ended June 30, 1995 and
$52,941 for the twelve months ended March 25, 1995. Future minimum lease
commitments under the agreement are as follows at June 30, 1995:
Year ended March Amount
---------------- ------
1996 $51,492
1997 $21,455
STOCKHOLDERS' EQUITY
- - --------------------
In June 1991, the Board of Directors and Stockholders approved the 1991
Incentive Stock Option Plan. All options granted under the Plan have been at
fair market value on the dates of grant. Options vest over three years and
expire no later than ten years from the date of grant.
Information concerning stock options for the fifteen months ended June 30, 1995
is as follows:
NUMBER OF OPTION PRICE
SHARES PER SHARE
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Outstanding at March 31, 1994.................. 28,666 $ .01
Options granted............................. 10,000 14.01
Options exercised........................... (18,000) .01
Options canceled............................ (10,666) .01
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Outstanding at March 25, 1995.................. 10,000 14.01
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Outstanding at June 30, 1995 (unaudited)....... 10,000 $14.01
=======
There were 3,334 exercisable options at June 30, 1995.
EMPLOYEE SAVINGS PLAN
- - ---------------------
As of June 30, 1995, the Company participated in the Accu-Fab Systems, Inc.
401(k) Plan, a defined contribution plan available to all employees who have
attained age 18. Eligible employees may contribute from 1% to 15% of their
salary on a pre-tax basis. Accu-Fab Systems, Inc. made no contributions to the
401(k) Plan during the fifteen months ended June 30, 1995.
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ACUMEN INCORPORATED
NOTES TO FINANCIAL STATEMENTS
SIGNIFICANT CUSTOMERS AND EXPORT SALES
- - --------------------------------------
During the three months ended June 30, 1995 and the twelve months ended March
25, 1995, one customer, Accu-Fab Systems Inc., accounted for $240,000 and
$1,114,000, or 17% and 32%, respectively, of revenue. See Related Party
Transactions.
The following summarizes export sales:
JUNE 30, MARCH 25,
(In thousands) 1995 1995
----------- ---------
(UNAUDITED)
United States.............................. $1,099 $2,964
Export:
Japan.................................... 316 431
Singapore................................ 14 130
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$1,429 $3,525
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RELATED PARTY TRANSACTIONS
- - --------------------------
As of June 30, 1995, the Company was majority owned by Accu-Fab Systems, Inc.,
a wholly-owned subsidiary of ATS Automation Tooling Systems, Inc. During the
three months ended June 30, 1995 and the twelve months ended March 25, 1995,
the Company's sales to Accu-Fab totaled $240,000 and $1,114,000, respectively.
At June 30, 1995, the Company's accounts receivable from and accounts payable
to Accu-Fab totaled $473,000 and $1,000, respectively.
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COGNEX CORPORATION
FORM 8-K ITEM 7(B)
PRO FORMA FINANCIAL INFORMATION
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COGNEX CORPORATION
INTRODUCTORY INFORMATION
On July 21, 1995, Cognex Corporation acquired all of the outstanding shares
of Acumen, Inc., a developer of machine vision systems for semiconductor
wafer identification, for approximately $14 million in a combination of cash
and Cognex stock and options. The acquisition is accounted for under the
purchase method of accounting.
The $14 million purchase price was allocated based on the fair values of the
identifiable assets of Acumen as follows: $0.1 million represents the net
assets of Acumen, $0.6 million represents deferred compensation costs to be
amortized over eight years, $2.4 million represents completed technology to
be amortized over five years, $10.2 million represents a charge for in-
process technology to be recorded in operations in the third quarter ending
October 1, 1995, and the remainder of $0.7 million represents goodwill to be
amortized over five years. The $10.2 million charge for in-process
technology is excluded from the accompanying pro forma statements of income.
The unaudited pro forma statements of income for the six months ended July 2,
1995 and the twelve months ended December 31, 1994 were prepared as if the
acquisition had taken place on January 1, 1994. The unaudited pro forma
balance sheet as of July 2, 1995 was prepared as if the acquisition had taken
place on July 2, 1995.
The unaudited pro forma financial information is intended to provide
information about the continuing impact of the acquisition by showing how it
might have affected historical financial statements if it had been
consummated at an earlier date. This information is not necessarily
indicative of future operations or the actual results that would have
occurred had the acquisition been consummated at the beginning of the
earliest period presented. This information should be read in conjunction
with the accompanying notes to the unaudited pro forma financial information.
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COGNEX CORPORATION
UNAUDITED PRO FORMA STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED JULY 2, 1995
(In thousands, except per share amounts)
HISTORICAL PRO FORMA
COGNEX ACUMEN ADJUSTMENTS RESULTS
-------- --------- ----------- ---------
Revenue.................................................. $43,159 $2,733 $45,892
Cost of revenue.......................................... 9,188 811 $ 237 (A) 10,236
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Gross margin............................................. 33,971 1,922 (237) 35,656
Research, development and engineering expenses........... 5,789 320 34 (B) 6,143
Selling, general and administrative expenses............. 10,881 289 3 (B) 11,243
70 (C)
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Income from operations................................... 17,301 1,313 (344) 18,270
Other income............................................. 1,300 6 (194)(D) 1,112
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Income before provision for income taxes................. 18,601 1,319 (538) 19,382
Provision for income taxes............................... 5,487 527 (120)(E) 5,894
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Net income............................................... $13,114 $ 792 $(418) $13,488
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Net income per share..................................... $ .64 $ .65
======= =======
Weighted average common shares outanding................. 20,545 96 (F) 20,641
======= ===== =======
The accompanying notes are an integral part of the pro forma financial
information.
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COGNEX CORPORATION
UNAUDITED PRO FORMA STATEMENT OF INCOME
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1994
(In thousands, except per share amounts)
HISTORICAL PRO FORMA
COGNEX ACUMEN ADJUSTMENTS RESULTS
------- ------ ----------- -------
Revenue................................................ $62,484 $3,525 $66,009
Cost of revenue........................................ 13,884 1,170 $ 474 (A) 15,528
------- ------ ------- -------
Gross margin........................................... 48,600 2,355 (474) 50,481
Research, development and engineering expenses......... 9,933 426 67 (B) 10,426
Selling, general and administrative expenses........... 16,847 299 6 (B) 17,292
140 (C)
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Income from operations................................. 21,820 1,630 (687) 22,763
Other income........................................... 1,462 1 (333)(D) 1,130
------- ------ ------- -------
Income before provision for income taxes............... 23,282 1,631 (1,020) 23,893
Provision for income taxes............................. 7,210 652 (218)(E) 7,644
------- ------ ------- -------
Net income............................................. $16,072 $ 979 $ (802) $16,249
======= ====== ======= =======
Net income per share................................... $ .87 $ .87
======= =======
Weighted average common shares outstanding............. 18,575 96 (F) 18,671
======= ======= =======
The accompanying notes are an integral part of the pro forma financial
information.
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COGNEX CORPORATION
UNAUDITED PRO FORMA BALANCE SHEET
JULY 2, 1995
(Dollars in thousands)
HISTORICAL PRO FORMA
COGNEX ACUMEN ADJUSTMENTS RESULTS
---------- -------- ------------ -----------
ASSETS
Current assets:
Cash and cash equivalents.............. $ 23,317 $ 736 $(6,346)(G) $ 17,707
Investments............................ 59,569 59,569
Accounts receivable.................... 16,148 1,000 17,148
Inventories............................ 5,403 333 5,736
Deferred income taxes.................. 1,652 1,652
Prepaid expenses and other............. 4,491 14 4,505
-------- ------ ------- --------
Total current assets............... 110,580 2,083 (6,346) 106,317
Property, plant and equipment, net......... 20,513 42 20,555
Other assets............................... 542 3,066 (G) 3,608
-------- ------ ------- --------
$131,635 $2,125 $(3,280) $130,480
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ...................... $ 1,060 $ 100 $ 1,160
Accrued expenses ...................... 6,258 72 $ 308 (G) 6,638
Accrued income taxes................... 1,649 358 2,007
Customer deposits...................... 744 744
Deferred revenue....................... 302 302
-------- ------ ------- --------
Total current liabilities.......... 10,013 530 308 10,851
-------- ------ ------- --------
Other liabilities.......................... 4,026 4,026
-------- ------ ------- --------
Stockholders' equity:
Common stock........................... 38 38
Additional paid-in capital............. 58,551 230 4,170 (G) 62,721
(230)(H)
Cumulative translation adjustment...... 143 143
Retained earnings...................... 63,596 1,365 (10,189)(G) 53,407
(1,365)(H)
Treasury stock......................... (706) (706)
-------- ------ ------ --------
Total stockholders' equity......... 121,622 1,595 (7,614) 115,603
-------- ------ ------ --------
$131,635 $2,125 $(3,280) $130,480
======== ====== ======= ========
The accompanying notes are an integral part of the pro forma financial
information.
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COGNEX CORPORATION
NOTES TO UNAUDITED PRO FORMA FINANCIAL INFORMATION
(A) The pro forma adjustment to "Cost of revenue" represents the amortization
over five years of $2,369,000 of completed technology purchased from
Acumen.
(B) The pro forma adjustments to "Research, development and engineering
expenses" and "Selling, general and administrative expenses" represent the
amortization over eight years of $590,000 of deferred compensation costs to
be paid to certain employees of Acumen.
(C) The pro forma adjustment to "Selling, general and administrative expenses"
represents the amortization over five years of $698,000 of goodwill
resulting from the allocation of the purchase price of Acumen.
(D) The pro forma adjustment to "Other income" represents reduced
interest income related to the cash outlays in connection with the
acquisition.
(E) The pro forma adjustment to "Provision for income taxes" represents the
tax benefit associated with items (B), (C), and (D) above.
(F) The pro forma adjustment to "Weighted average common shares outstanding"
represents 96,140 shares of Cognex common stock issued in connection with
the acquisition.
(G) The pro forma balance sheet adjustments represent the consideration paid
and the allocation of the purchase price based on the fair values of the
identifiable assets of Acumen as of July 2, 1995, with the remainder
allocated to goodwill.
(H) The pro forma balance sheet adjustments represent the elimination of the
additional paid-in capital and retained earnings of Acumen.
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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: October 4, 1995 COGNEX CORPORATION
/s/ Robert J. Shillman
----------------------------
Robert J. Shillman
President, Chief Executive Officer, and Chairman
(principal executive officer)
/s/ John J. Rogers, Jr.
----------------------------
John J. Rogers, Jr.
Vice President, Chief Financial Officer, and
Treasurer (principal financial and accounting
officer)
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