Robotic Vision Systems, Inc. Reports First Quarter of FY2001 Results

CANTON, MASSACHUSETTS - January 31, 2001 - Robotic Vision Systems, Inc. (RVSI) (NASDAQ: ROBV) today reported results for its first quarter ended December 31, 2000. Excluding unusual charges, revenues were $32,438,000 and the company had a net loss of $11,222,000, or $0.32 per share. Inclusive of those charges, the company reported a net loss of $13,885,000 or $0.40 per share. For the comparable year-earlier period, RVSI had revenue of $47,080,000 and net income of $1,326,000 or $0.04 per share.

A severe downturn in semiconductor capital spending
RVSI's first quarter results reflected significantly lower bookings and shipments at both the company's Semiconductor Equipment Group and Acuity CiMatrix Division.  "As previously reported, the company saw a dramatic slowdown in capital spending on the part of the semiconductor industry, especially Asian contract assemblers," said Pat V. Costa, Chairman and CEO of RVSI.  "This slowing of orders also extends to our machine vision sales to semiconductor equipment suppliers and certain other industries."

"Our Semiconductor Equipment Group is historically driven by a 50/50 mix between capacity additions and technology changeover," Mr. Costa said.  "We are seeing almost no capacity additions at present; almost all orders relate to technology changeover," Mr. Costa said.  "Also, we are concerned with the macroeconomic climate, which is exacerbating the semiconductor industry's down cycle.

"To this time, we've re-trenched modestly.  We pared $10 million of annualized operating expense from our company during November.  At that time, we thought revenues and bookings might fall briefly into the $50 to $55 million range.  It's clear that this downturn is much worse than we thought in November.  In the last weeks of the quarter we saw orders, including some just days away from shipment, be deferred for weeks or indefinitely.  In summary, it was a chaotic quarter with results that reflect the uncertainty of the times and of our customers."

Expectations for the second quarter
Mr. Costa said the company believes the December quarter represented the revenue trough and that some revenue improvement in the current quarter should occur.  "We are working to improve gross margins but have limited flexibility because of lower revenues," Mr. Costa said.  "We will cut expenses further where prudent.  We are fortunate to have a strong financial position to weather the current uncertainty."

Mr. Costa said RVSI continues to lower its break-even point, but barring a quick recovery in the semiconductor industry, he does not see an operating profit in the current quarter.  "Because of the uncertain near-term economic climate both within the semiconductor industry and in the larger world economy, we choose not to project beyond the current quarter," he said.

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"While this year won't repeat the 30-plus percent growth of 2000, the semiconductor industry has grown at a compound rate of 17% going back to 1980," he said.  "It is fueled by technology innovations, and our aim is to be a key provider of those innovations.  The same is true of the larger machine vision industry of which we are a part.  A general economic downturn will slow our growth, but there can be little doubt but that machine vision is becoming more critical each year to manufacturing, and innovations such as Data Matrix are making possible advances such as unit level traceability."

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.

Additional information for shareholders
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 x2417