Cognex Corporation Reports Third Quarter Results; Machine Vision Company Reports 58th Successive Quarter of Profitability

NATICK, Mass.--(BUSINESS WIRE)--Oct. 15, 2001--Cognex Corporation (NASDAQ: CGNX) today announced revenue for the third quarter ended September 30, 2001 of $33,974,000, compared to $67,960,000 reported for the third quarter of 2000. Net income for the third quarter ended September 30, 2001 was $2,292,000, or $0.05 per diluted share, compared to $19,391,000, or $0.42 per diluted share, reported for the comparable period a year ago.  

Revenue for the nine months ended September 30, 2001 was $115,559,000, compared to $184,642,000 reported for the same nine-month period a year ago. For the nine months ended September 30, 2001, Cognex reported net income of $9,208,000, or $0.20 per diluted share, compared to $52,161,000, or $1.14 per diluted share, for the comparable period in 2000.   

Reported results for the third quarter and first nine months in both 2000 and 2001 include the amortization of goodwill. Excluding the amortization of goodwill, net income for the quarter and nine months ended September 30, 2001 would have been $0.06 per diluted share and $0.24 per diluted share, respectively, compared to $0.43 per diluted share and $1.16 per diluted share, respectively, in the comparable periods a year ago.   

'Our third quarter results were down significantly from what we reported in 2000 primarily due to a worldwide slowdown in capital equipment spending by manufacturers in the semiconductor and electronics industries,' said Dr. Robert J. Shillman, Cognex's President, Chief Executive Officer, and Chairman. 'The third quarter order rate declined on a sequential basis and, in recent weeks, it has been trending even lower. Given this continued slowing in demand, we believe that revenue for the fourth quarter of 2001 will be down sequentially by approximately 25%, and we expect to report a loss in the range of $0.01 to $0.03 per share. This would be the first quarterly loss for Cognex, excluding acquisition-related charges, in fifty-eight successive quarters.'   

Over the past nine months, Cognex has implemented a number of cost-containment measures to more closely align expenses to the lower level of customer demand. These measures include salary reductions, elimination of all company bonuses, mandatory shutdown days, a restricted hiring plan, and a reduction in discretionary spending. Most recently, the company announced the elimination of 85 positions at its Modular Vision Systems Division (MVSD), the business which has been most severely impacted by the high tech slowdown.   

Dr. Shillman continued, 'Although we have limited visibility into demand for the fourth quarter of 2001 and no visibility for next year, we are very negative on the outlook given the severe slowdown that we are currently experiencing as well as the very uncertain economic conditions that exist today. We see no reason to believe that our business will improve significantly in the near term. On the contrary, we believe it will take quite some time for chip makers and manufacturers of electronic products, as well as their equipment suppliers, to work through the inventory that exists today and for our OEM customers to again order significant quantities from Cognex. Therefore, we are anticipating that both revenue and earnings for 2002 will be lower than for 2001.'   

'In spite of the current, very difficult environment, we remain confident about the long-term future of our business. In the first nine months of 2001, we closed more new customers than we previously signed in any one full year. We are continuing our ongoing product development schedule to be ready for the many opportunities for machine vision when business conditions improve. And, we have a strong balance sheet with $290 million in cash and investments and no debt. We've been through slowdowns in the past and, although this slowdown is far more serious than any prior one, we expect to emerge in an even stronger position relative to our competition,' concluded Dr. Shillman.   

Analyst Conference Call and Simultaneous Webcast   
Cognex Corporation will host an analyst conference call to discuss its results for the third quarter of 2001, as well as the financial outlook, today at 5:30 p.m. eastern. The telephone number to listen to the live conference call is 212-676-5258. A replay of the conference call will begin at approximately 7:30 p.m. eastern today and will be available for one week. To listen to the replay of the conference call, the telephone number is 800-633-8284 (or 858-812-6440 if outside the United States) and the access code for the replay is 19824190.    Internet users can listen to a real-time audio broadcast of the conference call on Cognex's website at http://www.cognex.com. An archive of the webcast will be available on Cognex's website for one week.   

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 to date more than 150,000 machine vision systems, representing over $1 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 which 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 which are used for inspecting the surfaces of products that are manufactured in a continuous fashion, such as metals, paper, 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 are forward-looking statements. These statements are based on the company's current expectations and estimates as to prospective events and circumstances which may or may not be in the company's control and as to which there can be no firm assurances given. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. The company wishes to caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The company disclaims any obligation subsequently to revise forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Further discussions of risk factors are also available in the company's registration statements filed with the Securities and Exchange Commission.

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