Exhibit 99.1
Cognex Corporation Reports First Quarter Results for 2004
NATICK, Mass.--(BUSINESS WIRE)--April 20, 2004--
Machine Vision Company Announces Dramatic Increases in Bookings,
Revenues and Profits
Overview of the Quarter
Cognex Corporation (NASDAQ: CGNX) today announced revenue for the
first quarter ended April 4, 2004 of $48,169,000, and net income of
$8,567,000, or $0.18 per diluted share. These results compare very
favorably with both the comparable quarter in 2003 and with the prior
quarter, as shown in the table below:
Earnings
Time Period Revenue Net Income per Diluted
Share
Current quarter: Q1-04 $48,169,000 $8,567,000 $0.18
Prior year's quarter: Q1-03 $32,888,000 $1,793,000 $0.04
Increase from Q1-03 to Q1-04 46% 378% 345%
Prior quarter: Q4-03 $41,878,000 $5,714,000 $0.13
Increase from Q4-03 to Q1-04 15% 50% 44%
"I am overjoyed to report significant increases in revenue and
profits for the first quarter of 2004, both year-on-year and
sequentially," said Dr. Robert J. Shillman, Cognex's Chief Executive
Officer and Chairman. "These increases were driven primarily by strong
demand from our customers in the semiconductor industry, whose
businesses have recovered from the three year slump. In addition,
despite the turnaround, we continued to keep a tight rein on spending
and invested only in those areas that drive revenue, such as in sales
and marketing. Bottom line...our first quarter results have given us a
great start to 2004, and we believe that 2004 will be an excellent
year for Cognex."
Details of the Quarter
Statement of Operations Highlights - First Quarter of 2004
-- Revenue for the first quarter of 2004 increased 46% over the
comparable quarter in 2003 and 15% on a sequential basis. The
increase, both year-on-year and sequentially, is due to higher
sales to Original Equipment Manufacturer (OEM) customers in
the semiconductor industry.
-- Gross margin was 69% in the first quarter of 2004 compared to
64% in the comparable quarter in 2003 and 68% in the prior
quarter. Cost of revenue for the first quarter of 2004 as well
as the first and fourth quarters of 2003 includes a benefit of
$262,000, $309,000 and $116,000, respectively, relating to an
inventory reserve recorded in the fourth quarter of 2001.
Excluding this benefit, gross margin would have been 69% in
the first quarter of 2004, 63% in the first quarter of 2003,
and 68% in the prior quarter. The increase in gross margin,
both year-on-year and sequentially, is due to higher sales
volume as well as product mix.
-- Research, Development & Engineering (R, D & E) spending in the
first quarter of 2004 increased 15% from the comparable
quarter in 2003 and 11% from the prior quarter. The increase
in R, D & E spending, both year-on-year and sequentially, is
due to higher employee-related expenses including a full
quarter of spending for Gavitec's machine vision business,
which was acquired on December 1, 2003, and the accrual of
anticipated company bonuses for 2004.
-- Selling, General & Administrative (S, G & A) spending in the
first quarter of 2004 increased 23% from the comparable
quarter in 2003 and 10% on a sequential basis. The increase in
S, G & A spending, both year-on-year and sequential, is due to
higher employee-related costs, including higher commissions,
additional end-user sales personnel, and the accrual of
anticipated company bonuses for 2004, as well as the impact of
foreign exchange rates on the company's international
operations.
-- Investment and other income was $1,274,000 in the first
quarter of 2004 compared to $1,294,000 in the comparable
quarter of 2003 and $1,396,000 in the prior quarter. The
decrease in investment and other income, both year-on-year and
sequentially, is due to lower yields on cash and investment
balances.
-- The foreign currency gain was $625,000 in the first quarter of
2004 as compared to a loss of $627,000 in the comparable
quarter of 2003 and a loss of $749,000 in the prior quarter.
The company recognizes foreign currency gains and losses on
the revaluation and settlement of accounts receivable balances
that are reported in one currency and collected in another.
-- The effective tax rate was 29% in the first quarter of 2004 as
compared to 31% in both the comparable quarter of 2003 as well
as in the prior quarter. The decrease in the effective tax
rate is due to more of the company's profits being earned and
taxed in lower tax jurisdictions in 2004 than in 2003.
Balance Sheet Highlights - April 4, 2004
-- Cognex's financial position remains very strong at April 4,
2004, with nearly $335,000,000 in cash and investments and no
debt. Cash and investments increased over $30,000,000 from the
end of 2003. This increase is the net result of positive cash
flow from operations and cash received from the exercise of
employee stock options, less a dividend payment of
approximately $2,700,000.
-- Days sales outstanding (DSO) for the first quarter of 2004 was
48 days, compared to 56 days in the prior quarter, and is well
within the company's targeted range.
-- Inventories at April 4, 2004 decreased 8% from the end of
2003, as inventory turns improved in the first quarter to a
rate equivalent to 3.8 times per year from 3.4 times per year
in the fourth quarter of 2003.
Business Trends and Financial Outlook
-- In the first quarter of 2004, bookings increased by nearly 50%
on a sequential basis, and the company's book-to-bill ratio
was above 1.0. This increase was primarily due to higher
orders from customers in the semiconductor and electronics
industries. Cognex expects revenue for the second quarter of
2004 to be between $53 million and $56 million. At that
revenue level, gross margin is expected to be in the high 60%
range. For the second quarter, operating expenses (R, D & E
and S, G & A) are expected to increase on a sequential basis
in the range of 5% to 10% as the company increases its
investment in sales and marketing to help drive revenue. The
effective tax rate for the second quarter of 2004 is expected
to be 29%. And, as a result of the above, earnings for the
second quarter are expected to be between $0.20 and $0.24 per
diluted share.
Analyst Conference Call and Simultaneous Webcast
Cognex Corporation will host a conference call to discuss its
results for the first quarter of 2004, as well as its financial
outlook, today at 5:30 p.m. eastern time. The telephone number for the
live call is 800-770-5589 (or 973-935-2039 if outside the United
States). A replay will begin tonight at approximately 7:30 p.m.
eastern time and will run continuously for 72 hours. The telephone
number for the replay is 877-519-4471 (or 973-341-3080 if outside the
United States) and the access code is 4677951.
Internet users can listen to a real-time audio broadcast of the
conference call as well as an archive of the call on Cognex's website
at http://www.cognex.com/investor/default.asp.
About Cognex Corporation
Cognex Corporation designs, develops, manufactures, and markets
machine vision systems, or computers that can "see." Cognex is the
world's leader in the machine vision industry, having shipped more
than 200,000 vision systems, representing over $1.5 billion in
cumulative revenue, since the company's founding in 1981. Cognex's
Modular Vision Systems Division, headquartered in Natick,
Massachusetts, specializes in machine vision systems that are used for
automating the manufacture of a wide range of discrete items and for
assuring their quality. Cognex's Surface Inspection Systems Division,
headquartered in Alameda, California, specializes in machine vision
systems that are used for inspecting the surfaces of products
manufactured in a continuous fashion, such as metals, papers and
plastics. In addition to its corporate headquarters in Natick,
Massachusetts, Cognex also has regional offices located throughout
North America, Japan, Europe, and Southeast Asia. Visit Cognex on-line
at http://www.cognex.com.
Forward-Looking Statement
Certain statements made in this press release and its attachments,
which do not relate solely to historical matters, are forward-looking
statements. You can identify these forward-looking statements by use
of the words "expects," "anticipates," "estimates," "believes,"
"projects," "intends," "plans," "will," "may," "shall" and similar
words. These forward-looking statements, which include statements
regarding business trends and the company's financial outlook, involve
risks and uncertainties that could cause actual results to differ
materially from those projected. Such risks and uncertainties include:
(1) global economic conditions that impact the capital spending trends
of manufacturers in a variety of industries; (2) the cyclicality of
the semiconductor and electronics industries; (3) the inability to
achieve significant international revenue; (4) fluctuations in foreign
exchange rates; (5) the loss of, or significant curtailment of
purchases by, any one or more principal customers; (6) the reliance
upon certain sole source suppliers to manufacture and deliver critical
components for the company's products; and (7) the other risks
detailed in the company's reports filed with the SEC, including the
company's Form 10-K for the fiscal year ended December 31, 2003. You
should not place undue reliance upon any such forward-looking
statements, which speak only as of the date made. The company
disclaims any obligation to update forward-looking statements after
the date of such statements.
COGNEX CORPORATION
Statements of Operations
(In thousands, except per share amounts)
Three Months Ended
April 4, December 31, March 30,
2004 2003 2003
(unaudited)
Revenue $48,169 $41,878 $32,888
Cost of revenue 14,789 13,234 11,716
Gross margin 33,380 28,644 21,172
Percentage of revenue 69% 68% 64%
Research, development, and
engineering expenses 6,898 6,227 5,983
Percentage of revenue 14% 15% 18%
Selling, general, and
administrative expenses 16,314 14,770 13,244
Percentage of revenue 34% 35% 40%
Operating income 10,168 7,647 1,945
Percentage of revenue 21% 18% 6%
Foreign currency gain (loss) 625 (749) (627)
Investment and other income 1,274 1,396 1,294
Income before taxes 12,067 8,294 2,612
Income tax provision 3,500 2,580 819
Net income $ 8,567 $ 5,714 $ 1,793
Percentage of revenue 18% 14% 5%
Net income per diluted common
and common equivalent share $ 0.18 $ 0.13 $ 0.04
Diluted weighted-average common
and common equivalent shares
outstanding 46,752 44,931 43,557
Cash dividends per common share $ 0.06 $ 0.06 $ -
COGNEX CORPORATION
Balance Sheets
(In thousands)
April 4, December 31,
2004 2003
Assets (unaudited)
Cash and investments $334,659 $303,502
Accounts receivable 26,456 26,697
Inventories 14,221 15,519
Property, plant, and equipment 24,500 24,980
Other assets 63,885 61,835
Total assets $463,721 $432,533
Liabilities and Stockholders' Equity
Current liabilities $46,957 $47,287
Other liabilities 243 252
Stockholders' equity 416,521 384,994
Total liabilities and stockholders'
equity $463,721 $432,533
COGNEX CORPORATION
Additional Information Schedule
(Dollars in thousands)
Three Months Ended
April 4, December 31, March 30,
2004 2003 2003
(unaudited)
Revenue $48,169 $41,878 $32,888
Revenue by division:
Modular Vision Systems Division 88% 80% 81%
Surface Inspection Systems Division 12% 20% 19%
Total 100% 100% 100%
Revenue by customer type:
Original equipment manufacturer 51% 38% 38%
End user 49% 62% 62%
Total 100% 100% 100%
Revenue by geography:
Japan 41% 30% 34%
United States 28% 36% 31%
Europe 26% 27% 24%
Other 5% 7% 11%
Total 100% 100% 100%
Revenue by industry:
Semiconductor 40% 26% 23%
Electronics 21% 22% 24%
Surface inspection 12% 20% 19%
Automotive 8% 10% 12%
Consumer products 2% 2% 2%
Medical 2% 2% 2%
Pharmaceutical 1% 2% 1%
Packaging 1% 1% 3%
Other 13% 15% 14%
Total 100% 100% 100%
Revenue by product:
PC-based vision systems 51% 41% 46%
Vision sensors 28% 32% 26%
Surface inspection vision systems 9% 16% 14%
Service 12% 11% 14%
Total 100% 100% 100%
Number of new customer accounts:
End user 191 212 210
Original equipment manufacturer 37 15 36
Total 228 227 246
CONTACT: Cognex Corporation
Susan Conway, 508-650-3353