NATICK, Mass.--(BUSINESS WIRE)--
Cognex
Corporation (NASDAQ: CGNX) today announced that the company set new
first quarter records for revenue, net income and earnings per share in
the first quarter of 2017. In Table 1 below, selected financial data for
the quarter ended
April 2, 2017 is compared to the first and fourth
quarters of 2016. A reconciliation of certain financial measures from
GAAP to non-GAAP is shown in Exhibit 2 of this news release.
|
Table 1
|
|
(Dollars in thousands, except per share amounts)
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
Net Income
|
|
|
|
Net
Income per
Diluted
Share
|
|
Quarterly Comparisons
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current quarter: Q1-17
|
|
|
|
$134,942
|
|
|
|
$45,655
|
|
|
|
$0.51
|
|
Prior year's quarter: Q1-16
|
|
|
|
$96,205 |
|
|
|
$14,885 |
|
|
|
$0.17 |
|
Change from Q1-16 to Q1-17
|
|
|
|
40%
|
|
|
|
207%
|
|
|
|
200%
|
|
Prior quarter: Q4-16
|
|
|
|
$129,322 |
|
|
|
$38,253 |
|
|
|
$0.43 |
|
Change from Q4-16 to Q1-17
|
|
|
|
4%
|
|
|
|
19%
|
|
|
|
19%
|
"I am thrilled with the results that we reported tonight for the first
quarter of 2017," said Dr.
Robert J. Shillman, Chairman of Cognex. "Generally, we see a dip in
revenue from Q4 to Q1, but this year revenue increased significantly
over both Q4 and Q1 of 2016. And the substantial leverage that
incremental revenue has on our profitability drove net income and
earnings per share to a record first quarter level."
"I am delighted with our team's strong performance in the first
quarter," said Robert
J. Willett, Chief Executive Officer of Cognex. "The year started on
an outstanding note. We made significant progress expanding our position
with large customers in consumer electronics and logistics. And, our
outlook for the broad factory automation market continued to improve as
the quarter progressed. Our customers appear confident in their business
prospects, and we believe they are eager to invest in Cognex machine
vision and ID because of the benefits that these products bring to their
companies."
Details of the Quarter
Statement of Operations Highlights - First Quarter of 2017
-
Revenue for Q1 2017 grew 40% from Q1 2016 and 4% from Q4 2016. Revenue
grew year-on-year in all major geographic regions, led by China and
the rest of Asia. From an industry perspective, the largest
contributions came from consumer electronics and automotive. On a
sequential basis, growth came from the consumer electronics industry
in Asia.
-
Gross margin was 79% for both Q1 2017 and Q4 2016, and 78% for Q1
2016. Gross margin increased year-on-year due to cost efficiencies
related to higher sales volume.
-
Research, Development & Engineering (RD&E) expenses increased 11% from
Q1 2016 and 17% from Q4 2016. RD&E increased year-on-year due to
higher employee-related costs, including the addition of new
engineering personnel from the company's acquisitions in 2016. On a
sequential basis, RD&E increased due to support of potential
high-volume opportunities and higher stock option expense.
-
Selling, General & Administrative (SG&A) expenses increased 21% from
Q1 2016 and 8% from Q4 2016. SG&A increased year-on-year due to
investments in the sales organization, higher commissions and travel,
and a higher bonus accrual. SG&A increased on a sequential basis due
to higher employee-related costs. Partially offsetting the sequential
increase was lower spending on sales demonstration equipment.
-
Investment and other income was $2,282,000 in Q1 2017, $1,344,000 in
Q1 2016 and $2,476,000 in Q4 2016. The increase year-on-year was due
to higher yields and a higher average invested balance. The decrease
on a sequential basis was due to an investment gain in Q4 that did not
repeat in Q1.
-
The effective tax rate was (16%) in Q1 2017, 15% in Q1 2016 and 11% in
Q4 2016. Excluding discrete tax items, the rate was 18% in all periods
presented (tax adjustments are summarized in Exhibit 2). Notably, Q1
2017 included a discrete tax benefit of $13 million ($0.15 per share)
related to employee stock options exercised during the quarter.
Balance Sheet Highlights - April 2, 2017
-
Cognex's financial position as of April 2, 2017, was very strong, with
$781 million in cash and investments and no debt. Cash and investments
increased by $36 million from the end of 2016, the net result of $48
million in cash generated from operations and $29 million in cash
received from the exercise of employee stock options, offset by $6
million in dividends paid to shareholders and $30 million spent to
repurchase 380,000 shares of Cognex's common stock. Cognex intends to
continue to repurchase shares of its common stock in Q2 2017, subject
to market conditions and other relevant factors.
-
Inventories increased by $5.6 million, or 21%, from the end of 2016 to
support expected growth in 2017.
Financial Outlook - Q2 2017
-
Cognex expects revenue for Q2 2017 to be between $165 million and $170
million. The company expects to report growth year-on-year in Q2
despite a lower contribution from consumer electronics, where larger
orders are expected to turn to revenue later in the year. Last year,
large consumer electronics orders were more evenly split between Q2
and Q3.
-
Gross margin is expected to be in the mid-to-high 70% range.
-
Operating expenses are expected to increase by up to 10% on a
sequential basis due to continued investments in growth activities and
costs associated with recent acquisitions.
-
The effective tax rate is expected to be 18% before discrete tax items.
Non-GAAP Financial Measures
-
Exhibit 2 of this news release includes a reconciliation of certain
financial measures from GAAP to non-GAAP. Cognex believes these
non-GAAP financial measures are helpful because they allow investors
to more accurately compare Cognex results over multiple periods using
the same methodology that management employs in its budgeting process
and in its review of Cognex's operating results. In particular,
non-GAAP presentations exclude the following: (1) stock option expense
for the purpose of calculating non-GAAP adjusted operating income, net
income and earnings per share (because these expenses have no current
effect on cash or the future uses of cash, and they fluctuate as a
result of changes in Cognex's stock price), and (2) certain one-time
discrete events, such as tax adjustments. Cognex does not intend for
non-GAAP financial measures to be considered in isolation, or as a
substitute for financial information provided in accordance with GAAP.
-
The tax effect of items identified in the reconciliation is estimated
by applying the effective tax rate to the pre-tax amount. However, if
a specific tax rate or tax treatment is required because of the nature
of the item and/or the tax jurisdiction where the item was recorded,
the tax effect is estimated by applying the relevant specific tax rate
or tax treatment, rather than the effective tax rate.
Analyst Conference Call and Simultaneous Webcast
-
Cognex will host a conference call today at 5:00 p.m. Eastern Time
(ET). The telephone number is (888) 615-2024 (or (734) 385-2520 if
outside the United States). A replay will begin at 8:00 p.m. ET today
and will be available until 11:59 p.m. ET on Thursday, May 4, 2017.
The telephone number for the replay is (855) 859-2056 (or (404)
537-3406 if outside the United States). The access code for both the
live call and the replay is 63207017.
-
Internet users can listen to a real-time audio broadcast of the
conference call or an archived recording on the Cognex Investor
Relations website: http://www.cognex.com/Investor.
About Cognex Corporation
Cognex Corporation designs, develops, manufactures and markets a range
of products, all of which incorporate sophisticated machine vision
technology that gives them the ability to "see." Cognex products include
barcode readers, machine vision sensors and machine vision systems that
are used in factories, warehouses and distribution centers around the
world to guide, gauge, inspect, identify and assure the quality of items
during the manufacturing and distribution process. Cognex is the world's
leader in the machine vision industry, having shipped more than 1.5
million vision-based products, representing over $5 billion in
cumulative revenue, since the company's founding in 1981. Headquartered
in Natick, Massachusetts, USA, Cognex has regional offices and
distributors located throughout the Americas, Europe and Asia. For
details visit Cognex online at http://www.cognex.com.
Certain statements made in this news release, which do not relate
solely to historical matters, are forward-looking statements. These
statements can be identified by use of the words "expects,"
"anticipates," "estimates," "believes," "projects," "intends," "plans,"
"will," "may," "shall," "could," "should," and similar words and other
statements of a similar sense. These forward-looking statements, which
include statements regarding business and market trends, future
financial performance, customer order rates, the timing of revenue
recognition, expected areas of growth, emerging markets, future product
mix, research and development activities, further stock repurchases,
investments, and strategic plans, involve known and unknown risks and
uncertainties that could cause actual results to differ materially from
those projected. Such risks and uncertainties include: (1) the
loss of a large customer; (2) current and future conditions in the
global economy; (3) the reliance on revenue from the consumer
electronics or automotive industries; (4) the inability to penetrate new
markets; (5) the inability to achieve significant international revenue;
(6) fluctuations in foreign currency exchange rates and the use of
derivative instruments; (7) information security breaches or business
system disruptions; (8) the inability to attract and retain skilled
employees; (9) the reliance upon key suppliers to manufacture and
deliver critical components for our products; (10) the failure to
effectively manage product transitions or accurately forecast customer
demand; (11) the inability to design and manufacture high-quality
products; (12) the technological obsolescence of current products and
the inability to develop new products; (13) the failure to properly
manage the distribution of products and services; (14) the inability to
protect our proprietary technology and intellectual property; (15) our
involvement in time-consuming and costly litigation; (16) the impact of
competitive pressures; (17) the challenges in integrating and achieving
expected results from acquired businesses; (18) potential impairment
charges with respect to our investments or for acquired intangible
assets or goodwill; (19) exposure to additional tax liabilities; and
(20) the other risks detailed in Cognex reports filed with the SEC,
including its Form 10-K for the fiscal year ended December 31, 2016. You
should not place undue reliance upon any such forward-looking
statements, which speak only as of the date made. Cognex disclaims any
obligation to update forward-looking statements after the date of such
statements.
|
|
|
Exhibit 1
|
|
COGNEX CORPORATION
|
|
Statements of Operations
|
|
(Unaudited)
|
|
Dollars in thousands, except per share amounts
|
|
|
|
|
|
Three-months Ended
|
|
|
|
April 2,
2017
|
|
December 31,
2016
|
|
April 3,
2016
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
134,942
|
|
|
$
|
129,322
|
|
|
$
|
96,205
|
|
|
Cost of revenue (1)
|
|
28,225
|
|
|
26,660
|
|
|
20,968
|
|
|
Gross margin
|
|
106,717
|
|
|
102,662
|
|
|
75,237
|
|
|
Percentage of revenue
|
|
79
|
%
|
|
79
|
%
|
|
78
|
%
|
|
Research, development, and engineering expenses (1)
|
|
22,770
|
|
|
19,440
|
|
|
20,555
|
|
|
Percentage of revenue
|
|
17
|
%
|
|
15
|
%
|
|
21
|
%
|
|
Selling, general, and administrative expenses (1)
|
|
46,521
|
|
|
42,985
|
|
|
38,338
|
|
|
Percentage of revenue
|
|
34
|
%
|
|
33
|
%
|
|
40
|
%
|
|
Operating income
|
|
37,426
|
|
|
40,237
|
|
|
16,344
|
|
|
Percentage of revenue
|
|
28
|
%
|
|
31
|
%
|
|
17
|
%
|
|
Foreign currency gain (loss)
|
|
(263
|
)
|
|
478
|
|
|
(100
|
)
|
|
Investment and other income
|
|
2,282
|
|
|
2,476
|
|
|
1,344
|
|
|
Income before income tax expense
|
|
39,445
|
|
|
43,191
|
|
|
17,588
|
|
|
Income tax expense (benefit)
|
|
(6,210
|
)
|
|
4,938
|
|
|
2,703
|
|
|
Net income
|
|
$
|
45,655
|
|
|
$
|
38,253
|
|
|
$
|
14,885
|
|
|
Percentage of revenue
|
|
34
|
%
|
|
30
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
Net income per weighted-average common and common-equivalent share:
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.53
|
|
|
$
|
0.45
|
|
|
$
|
0.18
|
|
|
Diluted
|
|
$
|
0.51
|
|
|
$
|
0.43
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common and common-equivalent shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
86,323
|
|
|
85,861
|
|
|
84,943
|
|
|
Diluted
|
|
89,177
|
|
|
88,251
|
|
|
86,541
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per common share
|
|
$
|
0.075
|
|
|
$
|
0.075
|
|
|
$
|
0.070
|
|
|
Cash and investments per common share
|
|
$
|
9.02
|
|
|
$
|
8.67
|
|
|
$
|
7.64
|
|
|
Book value per common share
|
|
$
|
11.67
|
|
|
$
|
11.20
|
|
|
$
|
10.00
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts include stock option expense, as follows:
|
|
|
|
|
|
|
|
Cost of revenue
|
|
$
|
430
|
|
|
$
|
257
|
|
|
$
|
293
|
|
|
Research, development, and engineering
|
|
2,610
|
|
|
1,329
|
|
|
2,179
|
|
|
Selling, general, and administrative
|
|
4,443
|
|
|
3,089
|
|
|
4,332
|
|
|
Total stock option expense
|
|
$
|
7,483
|
|
|
$
|
4,675
|
|
|
$
|
6,804
|
|
|
|
|
|
|
|
Exhibit 2
|
|
|
|
|
COGNEX CORPORATION
|
|
Reconciliation of Selected Items from GAAP to Non-GAAP
|
|
(Unaudited)
|
|
Dollars in thousands
|
|
|
|
|
|
|
|
|
Three-months Ended
|
|
|
|
April 2,
2017
|
|
December 31,
2016
|
|
April 3,
2016
|
|
Adjustment for stock option expense and tax benefit for stock
option exercises
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP)
|
|
$
|
37,426
|
|
|
$
|
40,237
|
|
|
$
|
16,344
|
|
|
Stock option expense
|
|
7,483
|
|
|
4,675
|
|
|
6,804
|
|
|
Operating income (Non-GAAP)
|
|
$
|
44,909
|
|
|
$
|
44,912
|
|
|
$
|
23,148
|
|
|
Percentage of revenue (Non-GAAP)
|
|
33%
|
|
|
35
|
%
|
|
24
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP)
|
|
$
|
45,655
|
|
|
$
|
38,253
|
|
|
$
|
14,885
|
|
|
Stock option expense
|
|
7,483
|
|
|
4,675
|
|
|
6,804
|
|
|
Tax effect on stock option expense
|
|
(2,439
|
)
|
|
(1,540
|
)
|
|
(2,228
|
)
|
|
Discrete tax benefit related to employee stock option exercises
|
|
(13,167
|
)
|
|
(4,643
|
)
|
|
(463
|
)
|
|
Net income (Non-GAAP)
|
|
$
|
37,532
|
|
|
$
|
36,745
|
|
|
$
|
18,998
|
|
|
Percentage of revenue (Non-GAAP)
|
|
28%
|
|
|
28
|
%
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted weighted-average common and common-equivalent
share (GAAP)
|
|
$
|
0.51
|
|
|
$
|
0.43
|
|
|
$
|
0.17
|
|
|
Share impact of non-GAAP adjustments identified above
|
|
(0.09
|
)
|
|
(0.01
|
)
|
|
0.05
|
|
|
Net income per diluted weighted-average common and common-equivalent
share (Non-GAAP)
|
|
$
|
0.42
|
|
|
$
|
0.42
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common and common-equivalent shares
outstanding (GAAP)
|
|
89,177
|
|
|
88,251
|
|
|
86,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exclusion of tax adjustments
|
|
|
|
|
|
|
|
|
|
|
Income before income tax expense (GAAP)
|
|
$
|
39,445
|
|
|
$
|
43,191
|
|
|
$
|
17,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit) (GAAP)
|
|
$
|
(6,210
|
)
|
|
$
|
4,938
|
|
|
$
|
2,703
|
|
|
Effective tax rate (GAAP)
|
|
(16
|
)%
|
|
11
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax adjustments:
|
|
|
|
|
|
|
|
|
|
|
Discrete tax benefit related to employee stock option exercises
|
|
(13,167
|
)
|
|
(4,643
|
)
|
|
(463
|
)
|
|
Other discrete tax events
|
|
(143
|
)
|
|
1,807
|
|
|
—
|
|
|
Income tax expense excluding tax adjustments (Non-GAAP)
|
|
$
|
7,100
|
|
|
$
|
7,774
|
|
|
$
|
3,166
|
|
|
Effective tax rate (Non-GAAP)
|
|
18%
|
|
|
18
|
%
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income excluding tax adjustments (Non-GAAP)
|
|
$
|
32,345
|
|
|
$
|
35,417
|
|
|
$
|
14,422
|
|
|
Percentage of revenue (Non-GAAP)
|
|
24%
|
|
|
27
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted weighted-average common and common-equivalent
share (GAAP)
|
|
$
|
0.51
|
|
|
$
|
0.43
|
|
|
$
|
0.17
|
|
|
Share impact of non-GAAP adjustments identified above
|
|
(0.15
|
)
|
|
(0.03
|
)
|
|
—
|
|
|
Net income per diluted weighted-average common and common-equivalent
share (Non-GAAP)
|
|
$
|
0.36
|
|
|
$
|
0.40
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common and common-equivalent shares
outstanding (GAAP)
|
|
89,177
|
|
|
88,251
|
|
|
86,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 3
|
|
|
COGNEX CORPORATION
|
|
Balance Sheets
|
|
(Unaudited)
|
|
Dollars in thousands
|
|
|
|
|
|
April 2, 2017
|
|
December 31, 2016 |
|
Assets
|
|
|
|
|
|
Cash and investments
|
|
$
|
781,305
|
|
$
|
745,170
|
|
Accounts receivable
|
|
58,236
|
|
55,438
|
|
Unbilled revenue
|
|
1,289
|
|
2,217
|
|
Inventories
|
|
32,615
|
|
26,984
|
|
Property, plant, and equipment
|
|
57,255
|
|
53,992
|
|
Goodwill and intangible assets
|
|
102,720
|
|
103,592
|
|
Other assets
|
|
62,824
|
|
51,211
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
1,096,244
|
|
$
|
1,038,604
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
$
|
56,019
|
|
$
|
52,369
|
|
Deferred revenue and customer deposits
|
|
13,801
|
|
8,211
|
|
Income taxes
|
|
11,337
|
|
10,554
|
|
Other liabilities
|
|
3,875
|
|
4,871
|
|
Shareholders' equity
|
|
1,011,212
|
|
962,599
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
$
|
1,096,244
|
|
$
|
1,038,604
|
|
|
|
Exhibit 4
|
|
COGNEX CORPORATION
|
|
Additional Information Schedule
|
|
(Unaudited)
|
|
Dollars in thousands
|
|
|
|
|
|
Three-months Ended
|
|
|
|
April 2,
2017
|
|
December 31,
2016
|
|
April 3,
2016
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
134,942
|
|
|
$
|
129,322
|
|
|
$
|
96,205
|
|
|
|
|
|
|
|
|
|
|
Revenue by geography:
|
|
|
|
|
|
|
|
Europe
|
|
31
|
%
|
|
38
|
%
|
|
35
|
%
|
|
Americas
|
|
31
|
%
|
|
32
|
%
|
|
38
|
%
|
|
Greater China
|
|
16
|
%
|
|
12
|
%
|
|
13
|
%
|
|
Other Asia
|
|
22
|
%
|
|
18
|
%
|
|
14
|
%
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
Revenue by market:
|
|
|
|
|
|
|
|
Factory automation
|
|
95
|
%
|
|
96
|
%
|
|
94
|
%
|
|
Semiconductor and electronics capital equipment
|
|
5
|
%
|
|
4
|
%
|
|
6
|
%
|
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170501006155/en/
Cognex Corporation
Susan Conway, 508-650-3353
Senior Director
of Investor Relations
susan.conway@cognex.com
Source: Cognex Corporation
News Provided by Acquire Media