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

CANTON, MASSACHUSETTS - May 21, 2001 - Robotic Vision Systems, Inc. (RVSI) (NASDAQ: ROBV) today reported results for its second quarter ended March 31, 2001. Revenues were $31,307,000 and, excluding unusual charges, the company had a net loss of $10,072,000, or $0.29 per share. Inclusive of charges for inventory reserves, severance and other charges and a write-off for in-process research and development costs, the company reported a net loss of $22,458,000 or $0.63 per share. For the comparable year-earlier period, RVSI had revenue of $56,153,000 and net income of $3,262,000 or $0.08 per diluted share.

'Our industry is in the midst of the deepest and sharpest slump in its history.  We simply have no precedent for the severity with which industry orders have slowed,' said Pat V. Costa, Chairman and CEO of RVSI.  'The reasons for the downturn, as we understand it, are a combination of too much chip inventory in supply channels at a time when end-user demand has slowed.  As a result, there is little back-end capacity being added, and certainly no opportunistic capacity by subcontract assemblers that helped fuel our growth in FY2000.  Further, because semiconductor company profits are being severely squeezed, there are fewer of the technology buys that ordinarily sustain us through downturns.

'The slowdown also crosses over into our Acuity CiMatrix business.  Several suppliers of equipment to the semiconductor industry that use our Visionscape™ platform have effectively stopped ordering for the time being.  And, similar to what has been reported by our peers in the machine vision industry, there is a general reluctance to commit to capital programs on the part of the industries we serve, including the electronics industry.'

Expectations for the balance of FY2001
'We believe the balance of our fiscal year is likely to be exceptionally lean.  In our second fiscal quarter, incoming orders were $25 million,' Mr. Costa said.  'We expect bookings in the current quarter to be lower than that figure.  Our lack of visibility mirrors that of the semiconductor capital equipment industry.  To that end we are re-assessing our organization and business plans.  Our goal is to ensure that RVSI is able to ride out this current downturn regardless of its length, and have the financial resources to respond to the upturn when it finally comes. 

'We are part of an industry that has excellent historic and future long-term growth.  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 over which we have no control.  However, we retain our industry leadership position and are improving our technological edge.  Inevitably, we believe the growth will return.'

Restatement
RVSI also today issued restated financial statements for the fiscal year ended September 30, 2000 and for the quarter ended December 31, 2000 to correct certain accounting errors involving the recognition of revenue at its Acuity CiMatrix division.  The restated financials were filed today with the SEC.  The effects of the restatement were not significantly different from the information provided in the Company's news release dated May 15, 2001.
In order to report results on a basis consistent with others in the industry, RVSI has adopted the provisions of SEC Staff Accounting Bulletin 101 ('SAB 101') in the current quarter retroactively to October 1, 2000.  SAB 101 sets forth guidelines on the timing of revenue recognition based upon factors such as passage of title, installation, payment and customer acceptance.  SAB 101 was effective for companies with fiscal years ended December 31 in 2000.  Prior to SAB 101 revenue was generally recognized upon shipment.  SAB 101-adjusted amounts are included in the condensed financial statements below.

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 Statement
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