NATICK, Mass.-- Cognex Corporation (CGNX) today announced record revenue, net income and earnings per share for the second quarter of 2014. Selected financial data for the quarter and six months ended June 29, 2014 is compared to the first quarter of 2014, the second quarter of 2013 and the first six months of 2013 in Table 1 below. A reconciliation of certain financial measures from GAAP to non-GAAP is shown in Exhibit 2 of this news release.
Table 1 |
|||||||||
Revenue |
Net Income |
Net Income per |
|||||||
Quarterly Comparisons |
|||||||||
Current quarter: Q2-14 | $108,802,000 | $25,948,000 | $0.29 | ||||||
Prior year’s quarter: Q2-13 | $86,510,000 | $16,820,000 | $0.19 | ||||||
Change from Q2-13 to Q2-14 | 26% | 54% | 54% | ||||||
Prior quarter: Q1-14 | $90,929,000 | $18,506,000 | $0.21 | ||||||
Change from Q1-14 to Q2-14 | 20% | 40% | 41% | ||||||
Year-to-Date Comparisons |
|||||||||
Six months ended June 29, 2014 | $199,731,000 | $44,454,000 | $0.50 | ||||||
Six months ended June 30, 2013 | $167,402,000 | $32,403,000 | $0.37 | ||||||
Change from first six months of 2013 to first six months of 2014 |
19% |
37% |
36% |
||||||
*Adjusted for the two-for-one stock split effective September 16, 2013. |
|||||||||
“What a quarter!” exclaimed Dr. Robert J. Shillman, Chairman of Cognex. “Our record-breaking financial results were above our expectations. We were highly profitable and delivered record earnings per share even with continued investments in engineering and sales to drive future growth.”
“Our second quarter performance was outstanding,” said Robert J. Willett, Chief Executive Officer of Cognex. “The strong upward momentum in our business is driven by past investments we made in our technology and sales team. It’s gratifying to see our hard work deliver these great financial results. Even more exciting is the substantial growth that we expect to report for Q3.”
Details of the Quarter
Statement of Operations Highlights – Second Quarter of 2014
Balance Sheet Highlights – June 29, 2014
Financial Outlook for Q3 2014
Non-GAAP Financial Measures
Analyst Conference Call and Simultaneous Webcast
About Cognex Corporation
Cognex Corporation designs, develops, manufactures and markets a range of products that 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 975,000 vision-based products, representing over $4 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 certain revenue recognition, expected areas of growth, emerging markets, future product mix, research and development activities, investments, stock repurchases, 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) current and future conditions in the global economy; (2) the cyclicality of the semiconductor and electronics industries; (3) the reliance on revenue from the automotive or consumer electronics 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) the loss of a large customer; (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; (20) information security breaches or business system disruptions; and (21) the other risks detailed in Cognex reports filed with the SEC, including its Form 10-K for the fiscal year ended December 31, 2013. 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 | Six-months Ended | |||||||||||||||||||
June 29, | March 30, | June 30, | June 29, | June 30, | ||||||||||||||||
2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
Revenue | $ | 108,802 | $ | 90,929 | $ | 86,510 | $ | 199,731 | $ | 167,402 | ||||||||||
Cost of revenue (1) | 25,790 | 21,084 | 21,150 | 46,874 | 40,573 | |||||||||||||||
Gross margin | 83,012 | 69,845 | 65,360 | 152,857 | 126,829 | |||||||||||||||
Percentage of revenue | 76 | % | 77 | % | 76 | % | 77 | % | 76 | % | ||||||||||
Research, development, and engineering expenses (1) | 13,622 | 12,502 | 11,887 | 26,124 | 23,208 | |||||||||||||||
Percentage of revenue | 13 | % | 14 | % | 14 | % | 13 | % | 14 | % | ||||||||||
Selling, general, and administrative expenses (1) | 38,668 | 34,900 | 33,300 | 73,568 | 65,467 | |||||||||||||||
Percentage of revenue | 36 | % | 38 | % | 38 | % | 37 | % | 39 | % | ||||||||||
Operating income | 30,722 | 22,443 | 20,173 | 53,165 | 38,154 | |||||||||||||||
Percentage of revenue | 28 | % | 25 | % | 23 | % | 27 | % | 23 | % | ||||||||||
Foreign currency gain (loss) | (96 | ) | (110 | ) | 76 | (206 | ) | 139 | ||||||||||||
Investment and other income | 726 | 514 | 517 | 1,240 | 1,026 | |||||||||||||||
Income before income tax expense | 31,352 | 22,847 | 20,766 | 54,199 | 39,319 | |||||||||||||||
Income tax expense | 5,404 | 4,341 | 3,946 | 9,745 | 6,916 | |||||||||||||||
Net income | $ | 25,948 | $ | 18,506 | $ | 16,820 | $ | 44,454 | $ | 32,403 | ||||||||||
Percentage of revenue | 24 | % | 20 | % | 19 | % | 22 | % | 19 | % | ||||||||||
Earnings per weighted-average common and common-equivalent share (2): | ||||||||||||||||||||
Basic | $ | 0.30 | $ | 0.21 | $ | 0.19 | $ | 0.51 | $ | 0.37 | ||||||||||
Diluted | $ | 0.29 | $ | 0.21 | $ | 0.19 | $ | 0.50 | $ | 0.37 | ||||||||||
Weighted-average common and common-equivalent shares outstanding (2): | ||||||||||||||||||||
Basic | 86,782 | 86,879 | 87,044 | 86,830 | 86,784 | |||||||||||||||
Diluted | 88,965 | 89,259 | 88,714 | 89,112 | 88,502 | |||||||||||||||
Cash dividends per common share (2) | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Cash and investments per common share (2) | $ | 5.39 | $ | 5.34 | $ | 4.90 | $ | 5.39 | $ | 4.90 | ||||||||||
Book value per common share (2) | $ | 7.87 | $ | 7.61 | $ | 7.07 | $ | 7.87 | $ | 7.07 | ||||||||||
(1) Amounts include stock option expense, as follows: |
||||||||||||||||||||
Cost of revenue | $ | 312 | $ | 348 | $ | 224 | $ | 660 | $ | 514 | ||||||||||
Research, development, and engineering | 988 | 1,056 | 650 | 2,044 | 1,463 | |||||||||||||||
Selling, general, and administrative | 2,656 | 2,600 | 1,907 | 5,256 | 4,102 | |||||||||||||||
Total stock option expense | $ | 3,956 | $ | 4,004 | $ | 2,781 | $ | 7,960 | $ | 6,079 | ||||||||||
(2) Prior year's share and per share amounts have been adjusted to reflect the 2-for-1 stock split of the Company's common stock that occurred in Q3 of 2013. |
Exhibit 2 |
|||||||||||||||||||||||
COGNEX CORPORATION | |||||||||||||||||||||||
Reconciliation of Selected Items from GAAP to Non-GAAP | |||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Dollars in thousands, except per share amounts | |||||||||||||||||||||||
Three-months Ended | Six-months Ended | ||||||||||||||||||||||
June 29, | March 30, | June 30, | June 29, | June 30, | |||||||||||||||||||
2014 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Adjustment for stock option expense | |||||||||||||||||||||||
Operating income (GAAP) | $ | 30,722 | $ | 22,443 | $ | 20,173 | $ | 53,165 | $ | 38,154 | |||||||||||||
Stock option expense | 3,956 | 4,004 |
|
2,781 | 7,960 | 6,079 | |||||||||||||||||
Operating income (Non-GAAP) | $ | 34,678 | $ | 26,447 | $ | 22,954 | $ | 61,125 | $ | 44,233 | |||||||||||||
Percentage of revenue (Non-GAAP) | 32 | % | 29 | % | 27 | % | 31 | % | 26 | % | |||||||||||||
Net income (GAAP) | $ | 25,948 | $ | 18,506 | $ | 16,820 | $ | 44,454 | $ | 32,403 | |||||||||||||
Stock option expense | 3,956 | 4,004 | 2,781 | 7,960 | 6,079 | ||||||||||||||||||
Tax effect on stock options | (1,266 | ) | (1,306 | ) | (910 | ) | (2,572 | ) | (2,004 | ) | |||||||||||||
Net income (Non-GAAP) | $ | 28,638 | $ | 21,204 | $ | 18,691 | $ | 49,842 | $ | 36,478 | |||||||||||||
Percentage of revenue (Non-GAAP) | 26 | % | 23 | % | 22 | % | 25 | % | 22 | % | |||||||||||||
Net income per diluted share (GAAP) (1) | $ | 0.29 | $ | 0.21 | $ | 0.19 | $ | 0.50 | $ | 0.37 | |||||||||||||
Stock option expense per diluted share | 0.04 | 0.04 | 0.03 | 0.09 | 0.07 | ||||||||||||||||||
Tax effect on stock options | (0.01 | ) | (0.01 | ) | (0.01 | ) | (0.03 | ) | (0.03 | ) | |||||||||||||
Net income per diluted share excluding stock option expense (Non-GAAP) | $ | 0.32 | $ | 0.24 | $ | 0.21 | $ | 0.56 | $ | 0.40 | |||||||||||||
(1) | Prior year's per share amounts have been adjusted to reflect the 2-for-1 stock split of the Company's common stock that occurred in Q3 of 2013. | ||||||||||||||||||||||
Exclusion of tax adjustments | |||||||||||||||||||||||
Income before income tax expense (GAAP) | $ | 31,352 | $ | 22,847 | $ | 20,766 | $ | 54,199 | $ | 39,319 | |||||||||||||
Income tax expense (GAAP) | $ | 5,404 | $ | 4,341 | $ | 3,946 | $ | 9,745 | $ | 6,916 | |||||||||||||
Effective tax rate (GAAP) | 17 | % | 19 | % | 19 | % | 18 | % | 18 | % | |||||||||||||
Tax adjustments: | |||||||||||||||||||||||
Discrete tax events | (553 | ) | - | - | (553 | ) | (555 | ) | |||||||||||||||
(553 | ) | - | - | (553 | ) | (555 | ) | ||||||||||||||||
Income tax expense excluding tax adjustments (Non-GAAP) | $ | 5,957 | $ | 4,341 | $ | 3,946 | $ | 10,298 | $ | 7,471 | |||||||||||||
Effective tax rate (Non-GAAP) | 19 | % | 19 | % | 19 | % | 19 | % | 19 | % | |||||||||||||
Exhibit 3 |
||||||
COGNEX CORPORATION | ||||||
Balance Sheets | ||||||
(Unaudited) | ||||||
In thousands | ||||||
June 29, | December 31, | |||||
2014 | 2013 | |||||
Assets | ||||||
Cash and investments | $ | 467,574 | $ | 455,121 | ||
Accounts receivable | 69,780 | 53,015 | ||||
Inventories | 30,737 | 25,694 | ||||
Property, plant, and equipment | 38,321 | 37,136 | ||||
Goodwill and intangible assets | 94,581 | 96,412 | ||||
Other assets | 59,463 | 42,321 | ||||
Total assets | $ | 760,456 | $ | 709,699 | ||
Liabilities and Shareholders' Equity | ||||||
Accounts payable and accrued liabilities | $ | 48,250 | $ | 43,818 | ||
Income taxes | 4,372 | 6,028 | ||||
Deferred revenue and customer deposits | 25,327 | 15,941 | ||||
Shareholders' equity | 682,507 | 643,912 | ||||
Total liabilities and shareholders' equity | $ | 760,456 | $ | 709,699 | ||
Exhibit 4 |
||||||||||||||||||||
COGNEX CORPORATION | ||||||||||||||||||||
Additional Information Schedule | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Dollars in thousands | ||||||||||||||||||||
Three-months Ended | Six-months Ended | |||||||||||||||||||
June 29, | March 30, | June 30, | June 29, | June 30, | ||||||||||||||||
2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
Revenue | $ | 108,802 | $ | 90,929 | $ | 86,510 | $ | 199,731 | $ | 167,402 | ||||||||||
Revenue by division: | ||||||||||||||||||||
Modular Vision Systems Division | 85 | % | 90 | % | 86 | % | 87 | % | 86 | % | ||||||||||
Surface Inspection Systems Division | 15 | % | 10 | % | 14 | % | 13 | % | 14 | % | ||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Revenue by geography: | ||||||||||||||||||||
Americas | 36 | % | 42 | % | 35 | % | 39 | % | 35 | % | ||||||||||
Europe | 31 | % | 33 | % | 31 | % | 32 | % | 31 | % | ||||||||||
Asia | 22 | % | 15 | % | 21 | % | 18 | % | 22 | % | ||||||||||
Japan | 11 | % | 10 | % | 13 | % | 11 | % | 12 | % | ||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||
Revenue by market: | ||||||||||||||||||||
Factory automation | 77 | % | 83 | % | 78 | % | 80 | % | 78 | % | ||||||||||
Web and surface inspection | 15 | % | 10 | % | 14 | % | 13 | % | 14 | % | ||||||||||
Semiconductor and electronics capital equipment | 8 | % | 7 | % | 8 | % | 7 | % | 8 | % | ||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | ||||||||||