Robotic Vision Systems, Inc. Comments on Share Price and Business Outlook

CANTON, MASSACHUSETTS - June 1, 2001 - Robotic Vision Systems, Inc. (RVSI) (NASDAQ: ROBV) today commented on its current business outlook and on the recent decline in the company's share price.

RVSI, along with other companies that serve the semiconductor capital equipment industry, is affected by the deepest and sharpest slump in that industry's history.  The reasons for the downturn are believed to be a combination of excess chip inventory in supply channels at a time when end-user demand has slowed, coupled with surplus capacity added last year by test, assembly and packaging subcontractors.  As a result, the back-end capacity additions that fueled RVSI's growth in FY2000 are absent.  Further, because semiconductor company profits are being severely squeezed, there are fewer of the technology buys that ordinarily sustain RVSI through downturns. The slowdown also crosses over into RVSI Acuity CiMatrix.  Several suppliers of equipment to the semiconductor industry that use RVSI's Visionscape® platform have halted orders for the time being.  And, similar to what has been reported by other machine vision companies, there is a general reluctance to commit to capital programs on the part of served industries, including the electronics industry.

Despite this downturn, we can say with confidence that we have the financial resources to see ourselves through two full years of semiconductor recession, even if business worsens and then stays that way indefinitely. We have those resources in cash, balance sheet assets, and borrowing capacity.  While no one expects or predicts a two-year-long downturn in the semiconductor capital equipment market, we have tried to take a worst-case scenario and, even under that scenario, we both survive and maintain the ability to ramp up as the market revives.

We are the dominant supplier of lead and grid-scanning equipment and expect to remain so.  We are the only company providing 3-D, in-tray scanning of semiconductors; our technology is the very best in the industry.  We are using the semiconductor industry downturn to increase market share in each of our principal served markets through the introduction of new products in each division, further widening the performance gap between ourselves and our competitors.  We are also introducing a line of 3-D inspection modules designed for integration into either OEM or factory-floor equipment, a new product area for the company.  We believe we can help spur the adoption of 3-D inspection tools throughout the back end of the semiconductor equipment industry, as well as inspection of a variety of non-semiconductor sectors such as opto-electronics, disk drives, and electronics.

Technology changeover will also help us through this period.  The semiconductor industry is moving to wafer bumping, and with that move is a requirement for wafer-level inspection using a combination of 2-D and 3-D technology.  We believe we have the industry's best solution in our WS-2500. The revenue opportunity is substantial and we fully intend to be the industry leader.  The orders we are winning today are on the technological merits, and we are being evaluated against the most current offerings of our competitors.

At Acuity CiMatrix, we are seeing a series of Data Matrix initiatives coming to fruition.  Probably none of these is more exciting than our work with a major semiconductor company on a marking program under which five plants will begin tracking their entire output using Data Matrix marks read by RVSI readers.  Our cumulative sales under this one program are in excess of a million dollars to date.  As part of this program we have sold Visionscape boards into equipment built by two leading chip handler suppliers.  The next phase of the program could take this program world-wide.   In medical applications, one of the world's most prominent manufacturers of medical ele ctronics equipment has expanded its use of Data Matrix on-parts marking to include heart implant shields and now has 600 to 700 RVSI read stations installed.  The automotive market is also becoming an important factor, where our readers are tracking autos, engines, and engine components by reading 2-D bar codes.

In addition to the developing market for direct parts marking and reading of Data Matrix in the automotive industry, we are now seeing the increased adoption of Data Matrix symbology for tracking and tracing of aerospace parts.  Major manufacturers of jet engines and their parts suppliers are moving forward with that technology.  The utilization of direct parts marking and reading in the aerospace industry will help stem the flow of counterfeit and unauthenticated parts in the logistics supply channel. Adoption is now occurring on an international scale and we are seeing repeat orders that move key accounts from pilot programs to a broader implementation.

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But despite these encouraging developments, we believe bookings in our quarter ending June 30, 2001 will be below those of the March 31, 2001 quarter.  Accordingly, we continue to pare costs and to outsource functions that can be done equally well by vendors while shifting fixed costs to variable ones.  We've made cuts that have pared the people that we added in anticipation of higher sales, but our core staff is still there.  We are also drawing up additional contingency plans to accomplish our goal of cost reductions.  These plans include the potential streamlining of process and support-oriented functions within the divisions.

There are also certain product lines within RVSI that are not central to our strategic mission that could perhaps fit very well with another company.  We have received unsolicited expressions of interest from organizations for certain of those lines, and we are evaluating whether to take those expressions of interest to the next step.  Divesting ourselves of those activities could help ensure that our core businesses are protected through even the most prolonged slump.

The potential divestiture of certain business activities in conjunction with our other outlined cost reduction activities have the potential to reduce our break-even point significantly and to ensure that, short of a worldwide economic calamity, we will emerge from the slump in sound financial condition, and be able to ramp up to meet demand.

RVSI is part of an industry that has a long-term growth rate of 26% going back to 1980.  In 2000, we saw the exhilaration of rapid revenue growth and the payoff of product development.  FY2001 is turning out to be a poor year because of a downturn in our served markets.  We also keep in mind that the same Dataquest forecast that predicts a 17% decline in sales in 2001 also shows a 13.2% jump in 2002, followed by 24.2% in 2003 and 30.8% in 2004. Inevitably, the growth will be there.

Our goal is to ensure that RVSI is able to ride out this downturn regardless of its length, and have the financial resources to respond to the upturn when it finally comes.  We believe investors should bear in mind both near-term realities and long-term prospects when evaluating the worth of RVSI's shares.

About RVSI
Robotic Vision Systems, Inc. (RVSI) (NASDAQ:ROBV) has the most comprehensive line of machine vision systems available today. Headquartered in Canton, Massachusetts, with offices worldwide, RVSI is the world leader in vision-based semiconductor inspection and media transfer equipment. Using leading-edge technology, RVSI joins vision-enabled process equipment, high-performance optics, lighting, and advanced hardware and software to assure product quality, identify and track parts, control manufacturing processes, and ultimately enhance profits for companies worldwide. Currently serving the semiconductor, electronics, aerospace, automotive, pharmaceutical and packaging industries, RVSI holds approximately 100 patents in a broad range of technologies.

Forward Looking Statements
Except for the historical information herein, certain matters discussed in this release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based on a number of factors, including, but not limited to: the historical cyclical nature of the semiconductor industry, risks in products and technology development, market acceptance of new products and continuing product demand, the impact of competitive products and pricing, changing economic conditions, both here and abroad, timely development and release of new products, strategic suppliers and customers, the effect of the company's accounting policies and other risk factors detailed in the Company's most recent registration statement, annual report on Form 10-K and 10K/A, and other filings with the Securities and Exchange Commission.

For further information contact:
Neal H. Sanders
(781) 302-2439