UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| [X] | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2002 or | |
| [ ] | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to |
Commission File Number 0-17869
COGNEX CORPORATION
(Exact name of registrant as specified in its charter)
| Massachusetts | 04-2713778 | |
|
|
||
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
One Vision Drive
Natick, Massachusetts 01760-2059
(508) 650-3000
(Address, including zip code, and telephone
number, including area code, of principal
executive offices)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes X
No
—— ——
As of July 28, 2002, there were 44,217,447 shares of Common Stock, $.002 par value, of the registrant outstanding.
Total number of pages: 16
Exhibit index is located on page 15
INDEX
| PART I | FINANCIAL INFORMATION | |
| Item 1. | Financial Statements | |
| Consolidated Statements of Operations for the three and six months ended June 30, 2002 and July 1, 2001 | ||
| Consolidated Balance Sheets at June 30, 2002 and December 31, 2001 | ||
| Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2002 | ||
| Consolidated Condensed Statements of Cash Flows for the six months ended June 30, 2002 and July 1, 2001 | ||
| Notes to Consolidated Financial Statements | ||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| PART II | OTHER INFORMATION | |
| Item 1. | Legal Proceedings | |
| Item 2. | Changes in Securities | |
| Item 3. | Defaults Upon Senior Securities | |
| Item 4. | Submission of Matters to a Vote of Security Holders | |
| Item 5. | Other Information | |
| Item 6. | Exhibits and Reports on Form 8-K | |
| Signatures |
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In thousands, except per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||||
| June 30, | July 1, | June 30, | July 1, | |||||||||||||||
| 2002 | 2001 | 2002 | 2001 | |||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||
Revenue
|
||||||||||||||||||
Product
|
$ | 22,406 | 30,896 | 39,662 | 70,082 | |||||||||||||
Service
|
4,265 | 6,483 | 8,789 | 11,503 | ||||||||||||||
| 26,671 | 37,379 | 48,451 | 81,585 | |||||||||||||||
Cost
of revenue
|
||||||||||||||||||
Product
|
6,282 | 9,185 | 12,111 | 18,383 | ||||||||||||||
Service
|
2,946 | 3,066 | 5,682 | 6,660 | ||||||||||||||
| 9,228 | 12,251 | 17,793 | 25,043 | |||||||||||||||
Gross
margin
|
||||||||||||||||||
Product |
16,124 | 21,711 | 27,551 | 51,699 | ||||||||||||||
Service |
1,319 | 3,417 | 3,107 | 4,843 | ||||||||||||||
| 17,443 | 25,128 | 30,658 | 56,542 | |||||||||||||||
Research, development, and engineering expenses |
6,498 | 7,655 | 12,850 | 15,837 | ||||||||||||||
Selling, general, and administrative expenses |
14,233 | 16,441 | 27,258 | 34,879 | ||||||||||||||
Amortization of goodwill |
— | 778 | — | 1,555 | ||||||||||||||
Operating income (loss) |
(3,288 | ) | 254 | (9,450 | ) | 4,271 | ||||||||||||
Investment income (loss) |
(4,025 | ) | 2,766 | (1,629 | ) | 5,484 | ||||||||||||
Other income |
62 | 149 | 227 | 416 | ||||||||||||||
Income (loss) before provision (benefit) for income taxes |
(7,251 | ) | 3,169 | (10,852 | ) | 10,171 | ||||||||||||
Income tax provision (benefit) |
(2,539 | ) | 1,014 | (3,620 | ) | 3,255 | ||||||||||||
Net income (loss) |
$ | (4,712 | ) | $ | 2,155 | $ | (7,232 | ) | $ | 6,916 | ||||||||
Net income (loss) per common and
common-equivalent share:
|
||||||||||||||||||
Basic
|
$ | (.11 | ) | $ | .05 | $ | (.16 | ) | $ | .16 | ||||||||
Diluted |
$ | (.11 | ) | $ | .05 | $ | (.16 | ) | $ | .15 | ||||||||
Weighted-average common and common-equivalent shares
outstanding: |
||||||||||||||||||
Basic |
44,172 | 43,545 | 44,072 | 43,504 | ||||||||||||||
Diluted |
44,172 | 45,442 | 44,072 | 45,177 | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
1
COGNEX CORPORATION
CONSOLIDATED BALANCE
SHEETS
(In thousands)
| June 30, | December 31, | ||||||||||
| 2002 | 2001 | ||||||||||
| (unaudited) | |||||||||||
ASSETS |
|||||||||||
Current assets: |
|||||||||||
Cash and cash equivalents |
$ | 34,083 | $ | 31,660 | |||||||
Short-term investments |
85,563 | 78,513 | |||||||||
Accounts receivable, less reserves of $2,071 and $2,080 in 2002 and
2001, respectively |
19,284 | 17,064 | |||||||||
Inventories |
21,482 | 23,078 | |||||||||
Deferred income taxes |
12,182 | 12,175 | |||||||||
Prepaid expenses and other current assets |
8,732 | 10,082 | |||||||||
Total current assets |
181,326 | 172,572 | |||||||||
Long-term investments |
172,681 | 182,542 | |||||||||
Property, plant, and equipment, net |
29,617 | 31,213 | |||||||||
Deferred income taxes |
13,468 | 12,001 | |||||||||
Intangible assets, net |
1,244 | 1,654 | |||||||||
Goodwill, net |
3,616 | 3,268 | |||||||||
Other assets |
3,666 | 3,654 | |||||||||
| $ | 405,618 | $ | 406,904 | ||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||||||
Current liabilities: |
|||||||||||
Accounts payable |
$ | 5,822 | $ | 4,356 | |||||||
Accrued expenses |
15,260 | 16,387 | |||||||||
Accrued income taxes |
691 | 2,099 | |||||||||
Customer deposits |
3,480 | 2,943 | |||||||||
Deferred revenue |
3,087 | 3,075 | |||||||||
Total current liabilities |
28,340 | 28,860 | |||||||||
Stockholders’ equity: |
|||||||||||
Common stock, $.002 par value -
Authorized: 140,000 shares, issued: 46,698 and 46,289 shares in 2002
and 2001, respectively |
93 | 93 | |||||||||
Additional paid-in capital |
180,547 | 173,675 | |||||||||
Treasury stock, at cost, 2,481 and 2,390 shares in 2002 and 2001,
respectively |
(45,886 | ) | (43,419 | ) | |||||||
Retained earnings |
246,805 | 254,037 | |||||||||
Accumulated other comprehensive loss |
(4,281 | ) | (6,342 | ) | |||||||
Total stockholders’ equity |
377,278 | 378,044 | |||||||||
| $ | 405,618 | $ | 406,904 | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
2
COGNEX CORPORATION
CONSOLIDATED STATEMENT OF
STOCKHOLDERS’ EQUITY
(In thousands)
| Accumulated | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional | Treasury Stock | Other | Total | ||||||||||||||||||||||||||||||||||
| Paid-in | Retained | Comprehensive | Comprehensive | Stockholders' | ||||||||||||||||||||||||||||||||||
| Shares | Par Value | Capital | Shares | Cost | Earnings | Loss | Loss | Equity | ||||||||||||||||||||||||||||||
Balance at December 31, 2001 |
46,289 | $ | 93 | $ | 173,675 | 2,390 | $ | (43,419 | ) | $ | 254,037 | $ | (6,342 | ) | $ | 378,044 | ||||||||||||||||||||||
Issuance of common stock
under stock option and
stock purchase plans |
409 | 5,336 | 5,336 | |||||||||||||||||||||||||||||||||||
Tax benefit from exercise
of stock options |
1,536 | 1,536 | ||||||||||||||||||||||||||||||||||||
Common stock received for
payment of stock option
exercises |
91 | (2,467 | ) | (2,467 | ) | |||||||||||||||||||||||||||||||||
Comprehensive loss: |
||||||||||||||||||||||||||||||||||||||
Net loss |
(7,232 | ) | $ | (7,232 | ) | (7,232 | ) | |||||||||||||||||||||||||||||||
Recognition of accumulated
losses on equity
securities, net of tax
of $2,506, in current
operations |
4,269 | 4,269 | 4,269 | |||||||||||||||||||||||||||||||||||
Foreign currency
translation adjustment |
(2,208 | ) | (2,208 | ) | (2,208 | ) | ||||||||||||||||||||||||||||||||
Comprehensive loss |
$ | (5,171 | ) | |||||||||||||||||||||||||||||||||||
Balance at June 30, 2002
(unaudited) |
46,698 | $ | 93 | $ | 180,547 | 2,481 | $ | (45,886 | ) | $ | 246,805 | $ | (4,281 | ) | $ | 377,278 | ||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
3
COGNEX CORPORATION
CONSOLIDATED CONDENSED STATEMENTS
OF CASH FLOWS
(In thousands)
| Six Months Ended | |||||||||||
| June 30, | July 1, | ||||||||||
| 2002 | 2001 | ||||||||||
| (unaudited) | |||||||||||
Cash flows from operating activities: |
|||||||||||
Net income (loss) |
$ | (7,232 | ) | $ | 6,916 | ||||||
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|||||||||||
Depreciation and amortization |
4,738 | 6,798 | |||||||||
Tax benefit from exercise of stock options |
1,536 | 573 | |||||||||
Loss on sale and impairment of equity securities |
6,184 | — | |||||||||
Deferred income tax provision (benefit)
|
(1,591 | ) | (755 | ) | |||||||
Change in current assets and current liabilities |
77 | 895 | |||||||||
Other |
535 | (154 | ) | ||||||||
Net cash provided by operating activities |
4,247 | 14,273 | |||||||||
Cash flows from investing activities: |
|||||||||||
Purchase of investments |
(44,615 | ) | (46,345 | ) | |||||||
Maturity and sale of investments |
46,594 | 36,015 | |||||||||
Purchase of property, plant, and equipment |
(1,331 | ) | (3,498 | ) | |||||||
Cash paid for business acquisitions |
(349 | ) | (361 | ) | |||||||
Net cash provided by (used in) investing activities |
299 | (14,189 | ) | ||||||||
Cash flows from financing activities: |
|||||||||||
Issuance of common stock under stock option and stock purchase plans |
2,869 | 2,441 | |||||||||
Net cash provided by financing activities |
2,869 | 2,441 | |||||||||
Effect of exchange rate changes on cash |
(4,992 | ) | 2,162 | ||||||||