Exhibit 99.1
Cognex Corporation Announces Ho-Hum First Quarter Results
NATICK, Mass.--(BUSINESS WIRE)--April 19, 2005--Cognex Corporation (NASDAQ:
CGNX) today announced revenue for the first quarter ended April 3, 2005, of
$43,198,000, and net income of $5,294,000, or $0.11 per diluted share. These
most recent quarterly results are compared to the company's historical results
for the first quarter of 2004 and for the fourth quarter of 2004 in the table
below.
Earnings per
Diluted
Time Period Revenue Net Income Share
- ------------------------------- ------------ ----------- ------------
Current quarter: Q1-05 $43,198,000 $5,294,000 $0.11
- ------------------------------- ------------ ----------- ------------
Prior year's quarter: Q1-04 $48,169,000 $8,567,000 $0.18
- ------------------------------- ------------ ----------- ------------
Change from Q1-04 to Q1-05 (10%) (38%) (39%)
- ------------------------------- ------------ ----------- ------------
Prior quarter: Q4-04 $43,909,000 $6,644,000 $0.14
- ------------------------------- ------------ ----------- ------------
Change from Q4-04 to Q1-05 (2%) (20%) (22%)
- ------------------------------- ------------ ----------- ------------
"Although we met Wall Street's consensus expectations for the quarter, and
although our net profits were very respectable by most companies' standards (at
12.25% of revenue), they are not yet where we want them to be. Furthermore, both
the year-on-year and sequential quarterly comparables are also disappointing,"
lamented Dr. Robert J. Shillman, Cognex's Chief Executive Officer and Chairman.
"There was some glimmer of good news in the quarter...orders increased by 16%
over Q4-2004, and our book-to-bill was above 1.0. And, we are mildly encouraged
by the fact that all three of the primary markets that we serve showed
sequential bookings increases; the largest was for SmartView(R), our vision
system for surface inspection, which booked a record $12,000,000 in the first
quarter, far surpassing the prior record."
Details of the Quarter
Statement of Operations Highlights - First Quarter of 2005
-- Revenue for the first quarter of 2005 decreased 10% from the
comparable quarter in 2004. This decrease is due to lower sales to
customers who make capital equipment for the semiconductor and
electronics industries, although some of the decline was offset by
revenue from discrete manufacturers in the factory automation area,
which increased 27% year-on-year. Revenue decreased by 2% on a
sequential basis, which was also due to the lower level of business
with customers in the semiconductor and electronics equipment market
as well as lower SmartView revenue.
-- Gross margin was 68% in the first quarter of 2005 compared to 69% in
the comparable quarter in 2004 and 73% in the prior quarter. Cost of
revenue for the first and fourth quarters of 2004 as well as the first
quarter of 2005 includes a benefit of $262,000, $317,000, and
$118,000, respectively, relating to an inventory reserve recorded in
the fourth quarter of 2001. Excluding this benefit, gross margin would
have been 68% in the first quarter of 2005, 69% in the first quarter
of 2004, and 72% in the prior quarter. The decrease in gross margin
year-on-year is due to the lower sales volume. On a sequential basis,
gross margin declined due to the revenue mix as well as favorable
variances in the prior quarter that didn't repeat in the first quarter
due to the volume decrease.
-- Research, Development & Engineering (R, D & E) spending in the first
quarter of 2005 decreased 8% from the comparable quarter in 2004, and
9% on a sequential basis. The decrease, both year-on-year and
sequentially, is due to lower employee-related expenses in the first
quarter of 2005, including a lower accrual of anticipated company
bonuses. In addition, the fourth quarter of 2004 included outside
service costs that didn't repeat in the first quarter.
-- Selling, General & Administrative (S, G & A) spending in the first
quarter of 2005 increased 7% from the first quarter of 2004 due to
higher employee-related costs, including additional end-user sales
personnel hired by the company during 2004, and the impact of foreign
exchange rates on the company's international operations. On a
sequential basis, S, G & A decreased 6% due to lower sales commissions
and a lower accrual of anticipated company bonuses in the first
quarter.
-- The company reported a foreign currency gain of $99,000 in the first
quarter of 2005 compared to a gain of $625,000 in the comparable
quarter of 2004 and a gain of $1,568,000 in the prior quarter. The
company recognizes foreign currency gains and losses on the
revaluation and settlement of accounts receivable and payable balances
that are reported in one currency and collected or paid in another.
-- Investment and other income was $1,470,000 in the first quarter of
2005 compared to $1,274,000 in the first quarter of 2004 and
$1,322,000 in the prior quarter. The increase in investment and other
income year-on-year is due to higher cash and investment balances in
the first quarter of 2005. On a sequential basis, the increase in
investment and other income is due to higher yields.
-- The effective tax rate was 26% in the first quarter of 2005 as
compared to 29% in both the comparable quarter of 2004 and 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
2005 than in 2004.
Balance Sheet Highlights - April 3, 2005
-- Cognex's financial position at April 3, 2005 was very strong, with
nearly $395,000,000 in cash and investments, and no debt. Cash and
investments increased by $3,400,000 from the end of 2004, primarily as
a result of positive cash flow from operations, less a dividend
payment of $3,700,000. Cumulative to date, the company has paid out
nearly $70 million in repurchases of its common stock on the open
market and $22 million in dividends.
-- Days sales outstanding (DSO) for the first quarter of 2005 was 61
days, and remains within the company's targeted range.
-- Inventories at April 3, 2005 decreased by $2,300,000, or 11%, from the
end of the prior quarter as the company used inventory to meet
customer requirements. Inventory turns in the first quarter increased
slightly to a rate equivalent to 2.9 times per year.
Business Trends and Financial Outlook
-- For the first quarter of 2005, bookings increased by 16% on a
sequential basis. All three of the primary markets served by the
company participated in the pickup, with the largest increase in
surface inspection due to record orders for SmartView. As a result,
Cognex expects revenue for the second quarter of 2005 to increase on a
sequential basis to between $46 million and $49 million. At that
revenue level, gross margin is expected to be approximately 70%. For
the second quarter, operating expenses (R, D & E and S, G & A) are
expected to increase by approximately 5% on a sequential basis. The
effective tax rate is expected to be 26%. As a result of the above,
earnings for the second quarter are expected to be between $0.13 and
$0.17 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 2005, as well as its financial outlook, today at 5:00 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 7:00 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 5889943.
Internet users can listen to a real-time audio broadcast of the conference
call, as well as an archive replay 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 225,000 machine vision
systems, representing over $1.7 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 has regional offices and
distributors 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, 2004. 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 3, Dec. 31, April 4,
2005 2004 2004
----------------------------
(unaudited)
Revenue $43,198 $43,909 $48,169
Cost of revenue 13,790 11,791 14,789
---------- -------- --------
Gross margin 29,408 32,118 33,380
Percentage of revenue 68% 73% 69%
Research, development, and engineering
expenses 6,315 6,958 6,898
Percentage of revenue 15% 16% 14%
Selling, general, and administrative
expenses 17,508 18,693 16,314
Percentage of revenue 41% 43% 34%
---------- -------- --------
Operating income 5,585 6,467 10,168
Percentage of revenue 13% 15% 21%
Foreign currency gain (loss) 99 1,568 625
Investment and other income 1,470 1,322 1,274
---------- -------- --------
Income before taxes 7,154 9,357 12,067
Income tax provision 1,860 2,713 3,500
---------- -------- --------
Net income $5,294 $6,644 $8,567
Percentage of revenue 12% 15% 18%
========== ======== ========
Net income per diluted common and common
equivalent share $0.11 $0.14 $0.18
========== ======== ========
Diluted weighted-average common and common
equivalent shares outstanding 47,181 46,157 46,752
========== ======== ========
Cash dividends per common share $0.08 $0.08 $0.06
========== ======== ========
COGNEX CORPORATION
Balance Sheets
(In thousands)
April 3, Dec. 31,
2005 2004
---------------------
(unaudited)
Assets
Cash and investments $394,455 $391,076
Accounts receivable 29,303 33,816
Inventories 17,799 20,091
Property, plant, and equipment 23,573 23,995
Other assets 59,582 64,330
----------- ---------
Total assets $524,712 $533,308
=========== =========
Liabilities and Stockholders' Equity
Current liabilities $58,285 $70,501
Stockholders' equity 466,427 462,807
----------- ---------
Total liabilities and stockholders' equity $524,712 $533,308
=========== =========
COGNEX CORPORATION
Additional Information Schedule
(Dollars in thousands)
Three Months Ended
April 3, Dec. 31, April 4,
2005 2004 2004
-----------------------------
(unaudited)
Revenue $43,198 $43,909 $48,169
=========== ======== ========
Revenue by division:
Modular Vision Systems Division 84% 83% 88%
Surface Inspection Systems Division 16% 17% 12%
----------- -------- --------
Total 100% 100% 100%
=========== ======== ========
Revenue by geography:
United States 37% 36% 28%
Europe 29% 29% 26%
Japan 28% 29% 41%
Other 6% 6% 5%
----------- -------- --------
Total 100% 100% 100%
=========== ======== ========
Revenue by industry:
Semiconductor and electronics capital
equipment 27% 27% 47%
Surface inspection 16% 17% 12%
Electronics other 14% 10% 9%
Automotive 13% 14% 8%
Semiconductor other 4% 6% 5%
Other 26% 26% 19%
----------- -------- --------
Total 100% 100% 100%
=========== ======== ========
Revenue by product:
PC-based vision systems 39% 37% 51%
Vision sensors 37% 36% 28%
Surface inspection vision systems 10% 13% 9%
Service 14% 14% 12%
----------- -------- --------
Total 100% 100% 100%
=========== ======== ========
Number of new customer accounts:
End user 214 268 191
Original equipment manufacturer 32 15 37
----------- -------- --------
Total 246 283 228
=========== ======== ========
CONTACT: Cognex Corporation
Susan Conway, 508-650-3353
Director of Investor Relations