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

CANTON, MASSACHUSETTS - August 7, 2001 - Robotic Vision Systems, Inc. (RVSI) (NASDAQ: ROBV) today reported results for its third quarter ended June 30, 2001. Revenues were $21,061,000 and, excluding unusual charges, the company had a pro-forma net loss of $13,476,000, or $0.38 per share. Inclusive of provision for inventory reserves, severance and other charges, the company reported a net loss of $14,623,000 or $0.41 per share.

These results compare to revenues of $61,181,000 and net income of $5,319,000 or $0.12 per diluted share in the third quarter of fiscal year 2000; and to revenue of $31,307,000 and a net loss of $22,458,000 or $0.63 per share in fiscal year 2001's second quarter.

'RVSI's revenues are being affected by two macro-economic events: the steepest and sharpest downturn in the history of the semiconductor and semiconductor capital equipment industries, and a generalized slowdown in capital investment by industry in general,' said Pat V. Costa, Chairman and CEO of RVSI.  'Taken together, we have seen our revenues fall by two-thirds over nine months.

'To cope with lower sales, we have cut spending in several stages, but the revenue decline has been more severe than anything we've experienced in the past, including the downturn of 1998.  At the trough of that downturn, RVSI' s quarterly revenues fell to $27.3 million.  This quarter, they were $21.1 million.'

'But we think we may finally be seeing indications of improvement.  In the past several weeks, we've seen more activity, more interest, and more sales. There is also anecdotal evidence in the industry, such as optimistic comments regarding future PC sales.  This may be the bottom.  After a weak September quarter, it may start getting better,' Mr. Costa, said. Future operating results

'Neither we nor anyone else can predict the duration of the semiconductor capital equipment downturn,' Mr. Costa said.  'So, put at its most basic, our goal is to get through the slump - whatever its duration - with our technology and market dominance intact and, when that slump has run its course, to have enough dry powder in the form of capital availability to book and ship every order accessible to us.

'To that end, we are accelerating efforts to conserve working capital.  Last quarter, we said we were prepared for a worst-case scenario of a two-year downturn.  Nothing that has happened in the past three months dissuades us that this is the prudent course, despite signs that an upturn could occur much earlier.  Our plan takes into account a certain level of tolerable losses and, to that end, we have given our two operating units strict expense targets that they must meet.  If there is in fact an order upturn early in 2002, then we will be ready for it, even with our leaner structure. 'At present, we believe our September quarter's revenues will be lower than the one we just finished.  We also believe our projected operating losses, excluding unusual charges, will be narrower.

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'However poor the current visibility, we see our long-term future as very bright,' Mr. Costa said.  'Both of our businesses are built on solid technological bases with exceptionally large and robust growth potential. Right now, we're seeing what happens when both of our served markets turn down simultaneously.  It doesn't alter their tremendous promise.  It only defers that promise a few quarters.'

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. 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