Robotic Vision Systems, Inc. Reports Fourth Quarter, Fiscal Year 2000 Results

CANTON, MASSACHUSETTS - November 2, 2000 - Robotic Vision Systems, Inc. (RVSI) (NASDAQ: ROBV) today reported results for its fourth quarter and fiscal year ended September 30, 2000. The world's premier provider of machine vision systems had fourth quarter revenues of $60,831,000 and net income of $1,530,000, or $0.04 per share. These results compare to revenues of $40,271,000 and net income of $287,000 or $0.00 per share in the fourth quarter of fiscal 1999. 

For the fiscal year ended September 30, 2000, RVSI had record revenues of $227,932,000, net income of $12,169,000, and net income per share of $0.31.  This compares to revenue of $128,230,000 and a net loss of $9,258,000 or $(0.38) per share for fiscal 1999.

Semiconductor capital equipment spending and European softness dampen results
RVSI's fourth quarter results reflected lower bookings and shipments at the company's Semiconductor Equipment Group.  As previously reported, the company attributes the order decline to the industry's inability to bring large amounts of back-end capacity on stream, coupled with two other factors: over-purchasing of test equipment that strained capital budgets and a need on the part of back-end subcontractors to see clear evidence of additional wafer starts at front-end facilities. "We are continuing to see orders for technology changeover and additions to capacity at certain back-end companies," said Pat V. Costa, Chairman and CEO of RVSI. "However, this 'period of digestion' has persisted into the first quarter of the new fiscal year, which limits our visibility on the current quarter."

Mr. Costa said that the industry trend favors a return to growth. "Overall chip demand is rising. New front-end capacity is inexorably coming on stream and the percentage of chips requiring inspection is rising.  Each of these trends tells us the semiconductor capital spending cycle is far from over, especially for back-end suppliers."

Fourth quarter earnings were also depressed by softness in European demand for Acuity CiMatrix products.  " July and August are traditionally slow periods in Europe, but September - which is usually very strong - proved to be yet another anemic sales month.  We believe the European sales slump is driven by the weak Euro and by generally slowing business conditions there," Mr. Costa said.

A marked year-to-year turnaround
For the full year, RVSI saw revenue gains of 77%, including a 112% sales increase at the Semiconductor Equipment Group.  "This was a marked year-to-year turnaround in the company's largest business," Mr. Costa said.  "While the revenue gain at Acuity CiMatrix was not as high, certain parts of that business also grew rapidly, including our Data Matrix-related 2-D bar code business, which more than doubled from FY1999."

Mr. Costa said the most significant change for the company was in profitability.  "We saw a swing of more than $20 million in profitability between FY1999 and FY2000; from a $9.3 million loss to a $12.2 million profit.  In the same period, we also recapitalized the company through an $80 million secondary offering, which erased our bank debt, put cash on our balance sheet, and financed our growth.  Today, we are able to capitalize on the opportunities we see in front of us."

Challenges for FY2001
Mr. Costa said the company's lower-than-expected bookings in the fourth quarter has served as a spur to re-evaluate expense levels across the company.  "Unless there is a very quick pickup in orders at our Semiconductor Equipment Group, we can expect to see shipments in the first quarter of only $50 to $55 million, which would place the company in the position of reporting a net loss for the quarter.  We need to pare our expense rate to better match incoming orders, and have identified several areas for immediate action.  While these moves will necessitate charges in the first quarter, they will help ensure that expenses remain under control."

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 and 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
For release: November 2, 2000 at 7:30 a.m.