[February 15, 2018] |
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Cognex Reports Record Revenue, Earnings and EPS for 2017
Cognex
Corporation (NASDAQ: CGNX) today announced financial results for the
fourth-quarter and full-year of 2017. Table 1 below shows selected
financial data for Q4-17 compared with Q4-16 and Q3-17, and the year
ended December 31, 2017 compared with the year ended December 31, 2016.
All periods presented reflect the two-for-one stock split paid in Q4-17.
In Q4-17, the Tax Cuts and Jobs Act of 2017 resulted in a one-time
charge to tax expense of $83 million, or $0.46 per share. This amount
includes the estimated U.S. tax on unrepatriated foreign earnings, the
revaluation of deferred tax positions to the new lower U.S. tax rate,
and the recharacterization of certain income under the law. Excluding
the estimated impact of U.S. tax reform and other discrete tax items,
Cognex set new fourth quarter records for revenue, net income and
earnings per share, all from continuing operations.
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Table 1
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Revenue
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Income/(loss) from Continuing Operations
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Income/(loss) per share from Continuing Operations
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Non-GAAP Income/(loss) per share from Continuing Operations*
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Quarterly Comparisons
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Current quarter: Q4-17
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$180,365,000
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($26,897,000)
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($0.16)
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$0.25
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Prior year's quarter: Q4-16
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$129,322,000
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$38,253,000
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$0.22
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$0.20
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Change: Q4-16 to Q4-17
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39%
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(170%)
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(173%)
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25%
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Prior quarter: Q3-17
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$259,739,000
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$102,348,000
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$0.57
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$0.51
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Change: Q3-17 to Q4-17
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(31%)
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(126%)
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(128%)
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(51%)
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Annual Comparisons
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Year ended 12/31/2017
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$747,950,000
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$177,178,000
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$0.99
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$1.22
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Year ended 12/31/2016
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$520,753,000
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$149,827,000
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$0.86
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$0.79
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Change: 2016 to 2017
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44%
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18%
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15%
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54%
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*Excludes tax adjustments. A reconciliation from GAAP to Non-GAAP is
shown in Exhibit 2 of this news release.
"What a fantastic year for Cognex!" exclaimed Dr.
Robert J. Shillman, Founder and Chairman of Cognex. "We set new
records for annual revenue, net income and earnings per share, all from
continuing operations. Our commitment to our long-term strategy
continues to deliver impressive results."
"Our 2017 achievements reflect the hard work of Cognoids around the
world and the entrepreneurial spirit that is an integral part of our
corporate culture," said Robert
J. Willett, Chief Executive Officer of Cognex. "We celebrate our
success while staying focused on the long term. We believe the markets
for our products continue to have significant growth potential as
manufacturers look to automate a broadening range of industrial tasks."
Mr. Willett continued, "Market dynamics were strong in 2017 and that has
continued into the first quarter of 2018. Even though Q1 will likely be
the lowest revenue quarter of the year, we will invest in new product
development, expand our sales force and develop our IT and other
infrastructure so that we are ready for the growth we expect in the
years to come."
Summary of the Year
For 2017, Cognex reported record financial results from continuing
operations, even with the impact of U.S. tax reform. Each of the three
largest industries contributing to revenue-consumer electronics,
automotive and logistics-showed double-digit growth, as did all the
company's major geographic regions. Operating income expanded to 35% of
revenue from 31% for 2016, even as the company invested for future
growth.
Details of the Quarter
Statement of Operations Highlights - Fourth Quarter of 2017
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Cognex reported record fourth quarter revenue in 2017. Revenue
increased 39% from Q4-16 and declined 31% from Q3-17. Year-on-year
growth came from a variety of industries, including consumer
electronics, logistics and automotive. The sequential decrease was due
to the Q3-17 timing of large orders from the consumer electronics
industry. Outside that industry, revenue increased by more than 10% on
a sequential basis.
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Gross margin was 77% for Q4-17 compared with 76% for Q3-17 and 79% for
Q4-16. Gross margin decreased year-on-year due primarily to higher
service revenue in Q4-17. The increase on a sequential basis is due to
a higher margin on product sales than in Q3-17.
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Research, Development & Engineering (RD&E) expenses increased 39% from
Q4-16 and 3% from Q3-17. RD&E increased both year-on-year and
sequentially due to additional engineering resources and product
development costs.
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Selling, General & Administrative (SG&A) expenses increased 41% from
Q4-16 and decreased 1% from Q3-17. SG&A increased year-on-year due to
investments in sales resources and higher employee-related costs,
including commissions and travel. The sequential decrease was a result
of the timing of marketing initiatives.
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Cognex reported foreign currency losses of $1,027,000 in Q4-17 and
$127,000 in Q3-17, and a foreign currency gain of $478,000 in Q4-16.
The foreign currency loss in Q4-17 resulted primarily from the
revaluation and settlement of accounts receivable balances reported in
one currency and collected in another.
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Investment and other income was $2,923,000 in Q4-17, $2,476,000 in
Q4-16 and $2,030,000 in Q3-17. Investment income increased both
year-on-year and sequentially because of higher yields and a higher
average invested balance. Also contributing to the increase on a
sequential basis was an expense in Q3-17 associated with changes to
the fair value of contingent consideration related to recent
acquisitions.
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The effective tax rate was 150% in Q4-17, 11% in Q4-16 and 9% in
Q3-17. Prior to the new U.S. tax law in December 2017, the tax rate
was 18% in all periods presented, excluding tax adjustments (which are
summarized in Exhibit 2). Notably, the Tax Cuts and Jobs Act of 2017
resulted in a tax adjustment in Q4-17 of $83 million. This amount
includes estimated U.S. tax on unrepatriated foreign earnings, the
revaluation of net deferred tax assets to the new lower U.S. tax rate,
and the recharacterization of certain income under the law. The impact
of U.S. tax reform may differ from this estimated tax adjustment, and
the estimated charges may accordingly be adjusted over the course of
2018.
Balance Sheet Highlights - December 31, 2017
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Cognex's financial position as of December 31, 2017, continued to be
very strong, with $828 million in cash and investments and no debt.
Cash and investments increased by $83 million from the end of 2016,
mainly as the result of $224 million in cash generated from operations
and $55 million in cash received from the exercise of employee stock
options. Cash outflows included $124 million spent to repurchase
Cognex common stock, $29 million in dividends paid to shareholders,
$29 million for capital expenditures, and $26 million for
acquisitions. Cognex intends to continue to repurchase shares of its
common stock in Q1-18, subject to market conditions and other relevant
factors.
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Accounts receivable increased by $64 million, or 115%, from the end of
2016 due to the company's substantial revenue growth in 2017 and the
timing of invoicing for a material customer.
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Inventories increased by $41 million, or 152%, from the end of 2016 to
support the company's higher business level and to build safety stock.
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Accounts payable and accrued liabilities increased by $39 million, or
75%, from the end of 2016 due to higher accruals for company bonus and
sales commissions, both resulting from the company's strong
performance in 2017, and from increased headcount. The bonus and sales
commissions will be paid in Q1-18.
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Income taxes payable increased substantially from the end of 2016
primarily due to the one-time charge recorded in Q4-17 for estimated
U.S. tax on unrepatriated foreign earnings. Cognex expects to pay that
liability over the 8-year period allowed by the Tax Act.
Financial Outlook - Q1 2018
This financial outlook assumes the adoption of a new revenue recognition
standard (ASC 606, "Revenue from Contracts with Customers") that became
effective on January 1, 2018. Cognex does not believe this standard will
have a material impact on total revenue. For a historical perspective,
Exhibit 5 of this news release includes the company's quarterly
Statement of Operations for 2017 adjusted for the impact of the new
standard.
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Revenue for Q1-18 is expected to be between $165 million and $175
million, which represents growth between 19% and 26% year-on-year. On
a sequential basis, Cognex expects the typical seasonal decline from
Q4 to Q1 in factory automation.
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Gross margin is expected to be in the mid-70% range, which is within
Cognex's target range for gross margin under the new revenue
recognition standard.
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Operating expenses are expected to increase by mid-single digits on a
sequential basis due primarily to the company's investments in
engineering and sales.
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The effective tax rate is expected to be 14% before discrete tax
items, reflecting the new U.S. corporate tax rate.
Non-GAAP Financial Measures
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Exhibit 2 of this news release includes a reconciliation of certain
financial measures from GAAP to non-GAAP. Cognex believes these
non-GAAP financial measures are helpful because they allow investors
to more accurately compare Cognex results over multiple periods using
the same methodology that management employs in its budgeting process
and in its review of Cognex's operating results. Non-GAAP
presentations exclude the following: (1) stock option expense for
calculating non-GAAP adjusted operating income and net income from
continuing operations (because these expenses have no current effect
on cash or the future uses of cash, and they fluctuate because of
changes in Cognex's stock price), and (2) certain one-time discrete
events, such as tax adjustments (because these costs are outside of
Cognex's normal business operations). Cognex does not intend for
non-GAAP financial measures to be considered in isolation, or as a
substitute for financial information provided in accordance with GAAP.
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The tax effect of items identified in the reconciliation is estimated
by applying the effective tax rate to the pre-tax amount. However, if
a specific tax rate or tax treatment is required because of the nature
of the item and/or the tax jurisdiction where the item was recorded,
the tax effect is estimated by applying the relevant specific tax rate
or tax treatment, rather than the effective tax rate.
Analyst Conference Call and Simultaneous Webcast
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Cognex will host a conference call today at 5:00 p.m. Eastern Time
(ET). The telephone number is (877) 704-4573 (or (201) 389-0911 if
outside the United States). A replay will begin at 8:00 p.m. ET today
and will be available until 11:59 p.m. ET on Sunday, February 18,
2018. The telephone number for the replay is (877) 660-6853 (or (201)
612-7415 if outside the United States). The access code for both the
live call and the replay is 13674455.
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Internet users can listen to a real-time audio broadcast of the
conference call or an archived recording on the Cognex Investor
Relations website: http://www.cognex.com/Investor.
About Cognex Corporation
Cognex Corporation designs, develops, manufactures and markets a wide
range of image-based products, all of which use artificial intelligence
(AI) techniques that give them the human-like ability to make decisions
on what they see. Cognex products include machine vision systems,
machine vision sensors and barcode readers that are used in factories
and distribution centers around the world where they eliminate
production and shipping errors.
Cognex is the world's leader in the machine vision industry, having
shipped more than 1.5 million vision-based products, representing over
$5 billion in cumulative revenue, since the company's founding in 1981.
Headquartered in Natick, Massachusetts, USA, Cognex has offices and
distributors located throughout the Americas, Europe and Asia. For
details visit Cognex online at www.cognex.com.
Certain statements made in this news release, which do not relate
solely to historical matters, are forward-looking statements. These
statements can be identified by use of the words "expects,"
"anticipates," "estimates," "believes," "projects," "intends," "plans,"
"will," "may," "shall," "could," "should," and similar words and other
statements of a similar sense. These forward-looking statements, which
include statements regarding business and market trends, future
financial performance, customer order rates, expected areas of growth,
anticipated tax rates, estimated impact of U.S. tax reform, future
product mix, research and development activities, further stock
repurchases, investments, and strategic plans, involve known and unknown
risks and uncertainties that could cause actual results to differ
materially from those projected. Such risks and uncertainties include:
(1) the loss of a large customer; (2) current and future conditions in
the global economy; (3) the reliance on revenue from the consumer
electronics or automotive industries; (4) the inability to penetrate new
markets; (5) the inability to achieve significant international revenue;
(6) fluctuations in foreign currency exchange rates and the use of
derivative instruments; (7) information security breaches or business
system disruptions; (8) the inability to attract and retain skilled
employees; (9) the failure to effectively manage our growth; (10) the
reliance upon key suppliers to manufacture and deliver critical
components for our products; (11) the failure to effectively manage
product transitions or accurately forecast customer demand; (12) the
inability to design and manufacture high-quality products; (13) the
technological obsolescence of current products and the inability to
develop new products; (14) the failure to properly manage the
distribution of products and services; (15) the inability to protect our
proprietary technology and intellectual property; (16) our involvement
in time-consuming and costly litigation; (17) the impact of competitive
pressures; (18) the challenges in integrating and achieving expected
results from acquired businesses; (19) potential impairment charges with
respect to our investments or for acquired intangible assets or
goodwill; (20) exposure to additional tax liabilities; and (21) the
other risks detailed in Cognex reports filed with the SEC, including its
Form 10-K for the fiscal year ended December 31, 2017. You should not
place undue reliance upon any such forward-looking statements, which
speak only as of the date made. Cognex disclaims any obligation to
update forward-looking statements after the date of such statements.
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Exhibit 1
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COGNEX CORPORATION
Statements of Operations
(Unaudited)
Dollars in thousands, except per share amounts
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Three-months Ended
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Twelve-months Ended
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December 31, 2017
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October 1, 2017
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December 31, 2016
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December 31, 2017
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December 31, 2016
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Revenue
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$
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180,365
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$
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259,739
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$
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129,322
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$
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747,950
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$
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520,753
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Cost of revenue (1)
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40,642
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62,360
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26,660
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168,698
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115,590
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Gross margin
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139,723
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197,379
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102,662
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579,252
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405,163
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Percentage of revenue
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77
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%
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76
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%
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79
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%
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77
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%
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78
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%
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Research, development, and engineering expenses (1)
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26,980
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26,078
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19,440
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99,205
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78,269
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Percentage of revenue
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15
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%
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10
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%
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15
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%
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13
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%
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15
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%
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Selling, general, and administrative expenses (1)
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60,635
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61,054
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42,985
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220,728
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166,110
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Percentage of revenue
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33
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%
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24
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%
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33
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%
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29
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%
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32
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%
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Operating income
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52,108
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110,247
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40,237
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259,319
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160,784
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Percentage of revenue
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29
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%
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42
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%
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31
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%
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35
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%
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31
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%
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Foreign currency gain (loss)
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(1,027
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)
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(127
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)
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478
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(1,601
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)
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101
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Investment and other income
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2,923
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2,030
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2,476
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9,204
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7,910
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Income before income tax expense
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54,004
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112,150
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43,191
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266,922
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168,795
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Income tax expense
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80,901
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9,802
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4,938
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89,744
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18,968
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Net income (loss) from continuing operations
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$
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(26,897
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)
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$
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102,348
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$
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38,253
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$
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177,178
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$
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149,827
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Percentage of revenue
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(15
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)%
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39
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%
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30
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%
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24
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%
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29
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%
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Net loss from discontinued operations
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-
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-
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-
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-
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(255
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)
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Net income (loss)
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$
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(26,897
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)
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$
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102,348
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$
|
38,253
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|
|
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$
|
177,178
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|
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$
|
149,572
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Percentage of revenue
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|
|
|
(15
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)%
|
|
|
39
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%
|
|
|
30
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%
|
|
|
|
|
24
|
%
|
|
|
|
29
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%
|
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Basic earnings per weighted-average common and common-equivalent
share (2):
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Net income (loss) from continuing operations
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$
|
(0.16
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)
|
|
|
$
|
0.59
|
|
|
|
$
|
0.22
|
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|
|
|
|
$
|
1.02
|
|
|
|
|
$
|
0.88
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|
Net loss from discontinued operations
|
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|
|
-
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|
|
|
-
|
|
|
|
-
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|
|
|
|
|
-
|
|
|
|
|
-
|
|
Net income (loss)
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|
$
|
(0.16
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)
|
|
|
$
|
0.59
|
|
|
|
$
|
0.22
|
|
|
|
|
|
$
|
1.02
|
|
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
Diluted earnings per weighted-average common and common-equivalent
share (2):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations
|
|
|
|
$
|
(0.16
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)
|
|
|
$
|
0.57
|
|
|
|
$
|
0.22
|
|
|
|
|
|
$
|
0.99
|
|
|
|
|
$
|
0.86
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|
Net loss from discontinued operations
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
-
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|
Net income (loss)
|
|
|
|
$
|
(0.16
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)
|
|
|
$
|
0.57
|
|
|
|
$
|
0.22
|
|
|
|
|
|
$
|
0.99
|
|
|
|
|
$
|
0.86
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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Weighted-average common and common-equivalent shares outstanding (2):
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|
|
|
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|
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Basic
|
|
|
|
173,397
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|
|
|
173,234
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|
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171,722
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|
|
|
|
|
173,287
|
|
|
|
|
170,676
|
|
Diluted
|
|
|
|
173,397
|
|
|
|
179,354
|
|
|
|
176,502
|
|
|
|
|
|
179,551
|
|
|
|
|
174,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per common share (2)
|
|
|
|
$
|
0.0450
|
|
|
|
$
|
0.0425
|
|
|
|
$
|
0.0375
|
|
|
|
|
|
$
|
0.1675
|
|
|
|
|
$
|
0.1475
|
|
Cash and investments per common share (2)
|
|
|
|
$
|
4.77
|
|
|
|
$
|
4.45
|
|
|
|
$
|
4.34
|
|
|
|
|
|
$
|
4.77
|
|
|
|
|
$
|
4.34
|
|
Book value per common share (2)
|
|
|
|
$
|
6.31
|
|
|
|
$
|
6.55
|
|
|
|
$
|
5.60
|
|
|
|
|
|
$
|
6.31
|
|
|
|
|
$
|
5.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts include stock option expense, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
$
|
477
|
|
|
|
$
|
520
|
|
|
|
$
|
257
|
|
|
|
|
|
$
|
1,881
|
|
|
|
|
$
|
1,052
|
|
Research, development, and engineering
|
|
|
|
2,932
|
|
|
|
2,765
|
|
|
|
1,329
|
|
|
|
|
|
11,022
|
|
|
|
|
6,271
|
|
Selling, general, and administrative
|
|
|
|
5,178
|
|
|
|
4,741
|
|
|
|
3,089
|
|
|
|
|
|
19,039
|
|
|
|
|
13,235
|
|
Total stock option expense
|
|
|
|
$
|
8,587
|
|
|
|
$
|
8,026
|
|
|
|
$
|
4,675
|
|
|
|
|
|
$
|
31,942
|
|
|
|
|
$
|
20,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Prior periods share and per share amounts have been adjusted to
reflect the 2-for-1 stock split of the Company's common stock that
occurred in the fourth quarter of 2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COGNEX CORPORATION
Reconciliation of Selected Items from GAAP to Non-GAAP
(Unaudited)
Dollars in thousands, except per share amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended
|
|
|
|
|
Twelve-months Ended
|
|
|
|
|
December 31, 2017
|
|
|
|
October 1, 2017
|
|
|
|
December 31, 2016
|
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
Adjustment for stock option expense and tax benefit for stock
option exercises
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (GAAP)
|
|
|
|
$
|
52,108
|
|
|
|
|
$
|
110,247
|
|
|
|
|
$
|
40,237
|
|
|
|
|
|
$
|
259,319
|
|
|
|
$
|
160,784
|
|
Stock option expense
|
|
|
|
8,587
|
|
|
|
|
8,026
|
|
|
|
|
4,675
|
|
|
|
|
|
31,942
|
|
|
|
20,558
|
|
Operating income (Non-GAAP)
|
|
|
|
$
|
60,695
|
|
|
|
|
$
|
118,273
|
|
|
|
|
$
|
44,912
|
|
|
|
|
|
$
|
291,261
|
|
|
|
$
|
181,342
|
|
Percentage of revenue (Non-GAAP)
|
|
|
|
34
|
%
|
|
|
|
46
|
%
|
|
|
|
35
|
%
|
|
|
|
|
39
|
%
|
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations (GAAP)
|
|
|
|
$
|
(26,897
|
)
|
|
|
|
$
|
102,348
|
|
|
|
|
$
|
38,253
|
|
|
|
|
|
$
|
177,178
|
|
|
|
$
|
149,827
|
|
Stock option expense
|
|
|
|
8,587
|
|
|
|
|
8,026
|
|
|
|
|
4,675
|
|
|
|
|
|
31,942
|
|
|
|
20,558
|
|
Tax effect on stock option expense
|
|
|
|
(2,812
|
)
|
|
|
|
(2,639
|
)
|
|
|
|
(1,540
|
)
|
|
|
|
|
(10,473
|
)
|
|
|
(6,747
|
)
|
Discrete tax benefit related to employee stock option exercises
|
|
|
|
(10,995
|
)
|
|
|
|
(8,620
|
)
|
|
|
|
(4,643
|
)
|
|
|
|
|
(38,569
|
)
|
|
|
(11,889
|
)
|
Net income (loss) from continuing operations (Non-GAAP)
|
|
|
|
$
|
(32,117
|
)
|
|
|
|
$
|
99,115
|
|
|
|
|
$
|
36,745
|
|
|
|
|
|
$
|
160,078
|
|
|
|
$
|
151,749
|
|
Percentage of revenue (Non-GAAP)
|
|
|
|
(18
|
)%
|
|
|
|
38
|
%
|
|
|
|
28
|
%
|
|
|
|
|
21
|
%
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations per diluted
weighted-average common and common-equivalent share (GAAP) (1)
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
$
|
0.57
|
|
|
|
|
$
|
0.22
|
|
|
|
|
|
$
|
0.99
|
|
|
|
$
|
0.86
|
|
Share impact of non-GAAP adjustments identified above (1)
|
|
|
|
(0.03
|
)
|
|
|
|
(0.02
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
|
(0.10
|
)
|
|
|
0.01
|
|
Net income (loss) from continuing operations per diluted
weighted-average common and common-equivalent share (Non-GAAP) (1)
|
|
|
|
$
|
(0.19
|
)
|
|
|
|
$
|
0.55
|
|
|
|
|
$
|
0.21
|
|
|
|
|
|
$
|
0.89
|
|
|
|
$
|
0.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common and common-equivalent shares
outstanding (GAAP) (1)
|
|
|
|
173,397
|
|
|
|
|
179,354
|
|
|
|
|
176,502
|
|
|
|
|
|
179,551
|
|
|
|
174,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exclusion of tax adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax expense (GAAP)
|
|
|
|
$
|
54,004
|
|
|
|
|
$
|
112,150
|
|
|
|
|
$
|
43,191
|
|
|
|
|
|
$
|
266,922
|
|
|
|
$
|
168,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (GAAP)
|
|
|
|
$
|
80,901
|
|
|
|
|
$
|
9,802
|
|
|
|
|
$
|
4,938
|
|
|
|
|
|
$
|
89,744
|
|
|
|
$
|
18,968
|
|
Effective tax rate (GAAP)
|
|
|
|
150
|
%
|
|
|
|
9
|
%
|
|
|
|
11
|
%
|
|
|
|
|
34
|
%
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Implications of the Tax Cuts and Jobs Act of 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transition tax on unrepatriated foreign earnings
|
|
|
|
$
|
101,379
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
$
|
101,379
|
|
|
|
-
|
|
Remeasurement of deferred tax positions
|
|
|
|
12,523
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
12,523
|
|
|
|
-
|
|
Recharacterization of certain income
|
|
|
|
(31,133
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
(31,133
|
)
|
|
|
-
|
|
Subtotal
|
|
|
|
$
|
82,769
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
$
|
82,769
|
|
|
|
-
|
|
Discrete tax benefit related to employee stock option exercises
|
|
|
|
(10,995
|
)
|
|
|
|
(8,620
|
)
|
|
|
|
(4,643
|
)
|
|
|
|
|
(38,569
|
)
|
|
|
(11,889
|
)
|
Other discrete tax events
|
|
|
|
(594
|
)
|
|
|
|
(1,765
|
)
|
|
|
|
1,807
|
|
|
|
|
|
(2,502
|
)
|
|
|
475
|
|
Income tax expense excluding tax adjustments (Non-GAAP)
|
|
|
|
$
|
9,721
|
|
|
|
|
$
|
20,187
|
|
|
|
|
$
|
7,774
|
|
|
|
|
|
$
|
48,046
|
|
|
|
$
|
30,382
|
|
Effective tax rate (Non-GAAP)
|
|
|
|
18
|
%
|
|
|
|
18
|
%
|
|
|
|
18
|
%
|
|
|
|
|
18
|
%
|
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations excluding tax adjustments
(Non-GAAP)
|
|
|
|
$
|
44,283
|
|
|
|
|
$
|
91,963
|
|
|
|
|
$
|
35,417
|
|
|
|
|
|
$
|
218,876
|
|
|
|
$
|
138,413
|
|
Percentage of revenue (Non-GAAP)
|
|
|
|
25
|
%
|
|
|
|
35
|
%
|
|
|
|
27
|
%
|
|
|
|
|
29
|
%
|
|
|
27
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from continuing operations per diluted
weighted-average common and common-equivalent share (GAAP) (1)
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
$
|
0.57
|
|
|
|
|
$
|
0.22
|
|
|
|
|
|
$
|
0.99
|
|
|
|
$
|
0.86
|
|
Share impact of non-GAAP adjustments identified above (1)
|
|
|
|
0.41
|
|
|
|
|
(0.06
|
)
|
|
|
|
(0.02
|
)
|
|
|
|
|
0.23
|
|
|
|
(0.07
|
)
|
Net income from continuing operations per diluted weighted-average
common and common-equivalent share (Non-GAAP) (1)
|
|
|
|
$
|
0.25
|
|
|
|
|
$
|
0.51
|
|
|
|
|
$
|
0.20
|
|
|
|
|
|
$
|
1.22
|
|
|
|
$
|
0.79
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted-average common and common-equivalent shares
outstanding (GAAP) (1) (2)
|
|
|
|
180,542
|
|
|
|
|
179,354
|
|
|
|
|
176,502
|
|
|
|
|
|
179,551
|
|
|
|
174,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Prior periods share and per share amounts have been adjusted to
reflect the 2-for-1 stock split of the Company's common stock that
occurred in the fourth quarter of 2017. (2) For the fourth quarter
of 2017, includes potential common stock equivalents of 7,145 that were
excluded in the GAAP net loss per share calculation because they were
anti-dilutive.
Exhibit 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COGNEX CORPORATION
Balance Sheets
(Unaudited)
Dollars in thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
|
|
December 31, 2016
|
Assets
|
|
|
|
|
|
|
|
|
Cash and investments
|
|
|
|
$
|
827,984
|
|
|
|
|
$
|
745,170
|
Accounts receivable
|
|
|
|
119,388
|
|
|
|
|
55,438
|
Unbilled revenue
|
|
|
|
7,454
|
|
|
|
|
2,217
|
Inventories
|
|
|
|
67,923
|
|
|
|
|
26,984
|
Property, plant, and equipment
|
|
|
|
78,048
|
|
|
|
|
53,992
|
Goodwill and intangible assets
|
|
|
|
126,397
|
|
|
|
|
103,592
|
Other assets
|
|
|
|
60,676
|
|
|
|
|
51,211
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
$
|
1,287,870
|
|
|
|
|
$
|
1,038,604
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
$
|
91,712
|
|
|
|
|
$
|
52,369
|
Deferred revenue and customer deposits
|
|
|
|
9,969
|
|
|
|
|
8,211
|
Income taxes
|
|
|
|
84,932
|
|
|
|
|
10,554
|
Other liabilities
|
|
|
|
5,904
|
|
|
|
|
4,871
|
Shareholders' equity
|
|
|
|
1,095,353
|
|
|
|
|
962,599
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
1,287,870
|
|
|
|
|
$
|
1,038,604
|
|
|
|
|
|
|
|
|
|
|
Exhibit 4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COGNEX CORPORATION
Additional Information Schedule
(Unaudited)
Dollars in thousands
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-months Ended
|
|
|
|
|
Twelve-months Ended
|
|
|
|
|
December 31, 2017
|
|
|
|
October 1, 2017
|
|
|
|
December 31, 2016
|
|
|
|
|
December 31, 2017
|
|
|
|
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$
|
180,365
|
|
|
|
|
$
|
259,739
|
|
|
|
|
$
|
129,322
|
|
|
|
|
|
$
|
747,950
|
|
|
|
|
$
|
520,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by geography:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe
|
|
|
|
42
|
%
|
|
|
|
56
|
%
|
|
|
|
38
|
%
|
|
|
|
|
43
|
%
|
|
|
|
45
|
%
|
Americas
|
|
|
|
32
|
%
|
|
|
|
20
|
%
|
|
|
|
32
|
%
|
|
|
|
|
28
|
%
|
|
|
|
30
|
%
|
Greater China
|
|
|
|
13
|
%
|
|
|
|
13
|
%
|
|
|
|
12
|
%
|
|
|
|
|
14
|
%
|
|
|
|
12
|
%
|
Other Asia
|
|
|
|
13
|
%
|
|
|
|
11
|
%
|
|
|
|
18
|
%
|
|
|
|
|
15
|
%
|
|
|
|
13
|
%
|
Total
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by market:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Factory automation
|
|
|
|
96
|
%
|
|
|
|
97
|
%
|
|
|
|
96
|
%
|
|
|
|
|
96
|
%
|
|
|
|
96
|
%
|
Semiconductor and electronics capital equipment
|
|
|
|
4
|
%
|
|
|
|
3
|
%
|
|
|
|
4
|
%
|
|
|
|
|
4
|
%
|
|
|
|
4
|
%
|
Total
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
|
100
|
%
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit 5
|
|
|
|
|
|
|
|
|
|
COGNEX CORPORATION
Restated Statements of Operations under ASC 606 "Revenue from
Contracts with Customers"
(Unaudited)
Dollars in thousands
|
|
|
|
|
Three-months Ended
|
|
|
|
|
April 2, 2017
|
|
|
|
July 2, 2017
|
|
|
|
October 1, 2017
|
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$
|
139,039
|
|
|
|
|
$
|
178,080
|
|
|
|
|
$
|
266,042
|
|
|
|
|
$
|
182,922
|
|
Cost of revenue
|
|
|
|
32,532
|
|
|
|
|
42,164
|
|
|
|
|
68,061
|
|
|
|
|
44,532
|
|
Gross margin
|
|
|
|
106,507
|
|
|
|
|
135,916
|
|
|
|
|
197,981
|
|
|
|
|
138,390
|
|
Percentage of revenue
|
|
|
|
77
|
%
|
|
|
|
76
|
%
|
|
|
|
74
|
%
|
|
|
|
76
|
%
|
Research, development, and engineering expenses
|
|
|
|
22,770
|
|
|
|
|
23,377
|
|
|
|
|
26,078
|
|
|
|
|
26,980
|
|
Percentage of revenue
|
|
|
|
16
|
%
|
|
|
|
13
|
%
|
|
|
|
10
|
%
|
|
|
|
15
|
%
|
Selling, general, and administrative expenses
|
|
|
|
46,521
|
|
|
|
|
52,518
|
|
|
|
|
61,054
|
|
|
|
|
60,635
|
|
Percentage of revenue
|
|
|
|
33
|
%
|
|
|
|
29
|
%
|
|
|
|
23
|
%
|
|
|
|
33
|
%
|
Operating income
|
|
|
|
37,216
|
|
|
|
|
60,021
|
|
|
|
|
110,849
|
|
|
|
|
50,775
|
|
Percentage of revenue
|
|
|
|
27
|
%
|
|
|
|
34
|
%
|
|
|
|
42
|
%
|
|
|
|
28
|
%
|
Foreign currency gain (loss)
|
|
|
|
(263
|
)
|
|
|
|
(184
|
)
|
|
|
|
(127
|
)
|
|
|
|
(1,027
|
)
|
Investment and other income
|
|
|
|
2,282
|
|
|
|
|
1,969
|
|
|
|
|
2,030
|
|
|
|
|
2,923
|
|
Income before income tax expense
|
|
|
|
39,235
|
|
|
|
|
61,806
|
|
|
|
|
112,752
|
|
|
|
|
52,671
|
|
Income tax expense (benefit)
|
|
|
|
(6,236
|
)
|
|
|
|
5,311
|
|
|
|
|
10,259
|
|
|
|
|
80,418
|
|
Net income (loss)
|
|
|
|
$
|
45,471
|
|
|
|
|
$
|
56,495
|
|
|
|
|
$
|
102,493
|
|
|
|
|
$
|
(27,747
|
)
|
Percentage of revenue
|
|
|
|
33
|
%
|
|
|
|
32
|
%
|
|
|
|
39
|
%
|
|
|
|
(15
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per weighted-average common and common-equivalent share (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.26
|
|
|
|
|
$
|
0.33
|
|
|
|
|
$
|
0.59
|
|
|
|
|
$
|
(0.16
|
)
|
Diluted
|
|
|
|
$
|
0.25
|
|
|
|
|
$
|
0.32
|
|
|
|
|
$
|
0.57
|
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common and common-equivalent shares outstanding (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
172,646
|
|
|
|
|
173,278
|
|
|
|
|
173,234
|
|
|
|
|
173,397
|
|
Diluted
|
|
|
|
178,354
|
|
|
|
|
179,228
|
|
|
|
|
179,354
|
|
|
|
|
173,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Prior periods share and per share amounts have been adjusted to
reflect the 2-for-1 stock split of the Company's common stock that
occurred in the fourth quarter of 2017. Adjustments to certain
financial data as a result of the implementation of ASC 606 "Revenue
from Contracts with Customers" on Jan. 1, 2018.
|
|
|
|
Three-months Ended
|
|
|
|
|
April 2, 2017
|
|
|
|
July 2, 2017
|
|
|
|
October 1, 2017
|
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue as reported
|
|
|
|
$
|
134,942
|
|
|
|
|
$
|
172,904
|
|
|
|
|
$
|
259,739
|
|
|
|
|
$
|
180,365
|
|
Adjustments to revenue
|
|
|
|
4,097
|
|
|
|
|
5,176
|
|
|
|
|
6,303
|
|
|
|
|
2,557
|
|
Revenue as restated
|
|
|
|
$
|
139,039
|
|
|
|
|
$
|
178,080
|
|
|
|
|
$
|
266,042
|
|
|
|
|
$
|
182,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue as reported
|
|
|
|
28,225
|
|
|
|
|
37,471
|
|
|
|
|
62,360
|
|
|
|
|
40,642
|
|
Adjustments to cost of revenue
|
|
|
|
4,307
|
|
|
|
|
4,693
|
|
|
|
|
5,701
|
|
|
|
|
3,890
|
|
Cost of revenue as restated
|
|
|
|
$
|
32,532
|
|
|
|
|
$
|
42,164
|
|
|
|
|
$
|
68,061
|
|
|
|
|
$
|
44,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin as reported
|
|
|
|
$
|
106,717
|
|
|
|
|
$
|
135,433
|
|
|
|
|
$
|
197,379
|
|
|
|
|
$
|
139,723
|
|
Adjustments to gross margin
|
|
|
|
(210
|
)
|
|
|
|
483
|
|
|
|
|
602
|
|
|
|
|
(1,333
|
)
|
Gross margin as restated
|
|
|
|
$
|
106,507
|
|
|
|
|
135,916
|
|
|
|
|
$
|
197,981
|
|
|
|
|
$
|
138,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin percentage as reported
|
|
|
|
79
|
%
|
|
|
|
78
|
%
|
|
|
|
76
|
%
|
|
|
|
77
|
%
|
Adjustments to gross margin percentage
|
|
|
|
(2
|
)%
|
|
|
|
(2
|
)%
|
|
|
|
(2
|
)%
|
|
|
|
(1
|
)%
|
Gross margin percentage as restated
|
|
|
|
77
|
%
|
|
|
|
76
|
%
|
|
|
|
74
|
%
|
|
|
|
76
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income as reported
|
|
|
|
$
|
37,426
|
|
|
|
|
$
|
59,538
|
|
|
|
|
$
|
110,247
|
|
|
|
|
$
|
52,108
|
|
Adjustments to operating income
|
|
|
|
(210
|
)
|
|
|
|
483
|
|
|
|
|
602
|
|
|
|
|
(1,333
|
)
|
Operating income as restated
|
|
|
|
$
|
37,216
|
|
|
|
|
$
|
60,021
|
|
|
|
|
$
|
110,849
|
|
|
|
|
$
|
50,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin as reported
|
|
|
|
28
|
%
|
|
|
|
34
|
%
|
|
|
|
42
|
%
|
|
|
|
29
|
%
|
Adjustments to operating margin
|
|
|
|
(1
|
)%
|
|
|
|
-
|
%
|
|
|
|
-
|
%
|
|
|
|
(1
|
)%
|
Operating margin as restated
|
|
|
|
27
|
%
|
|
|
|
34
|
%
|
|
|
|
42
|
%
|
|
|
|
28
|
%
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180215006298/en/
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