NATICK, Mass.--(BUSINESS WIRE)-- Cognex Corporation (NASDAQ: CGNX) today reported financial results for the first quarter of 2020. Table 1 below shows selected financial data for Q1-20 compared with Q1-19 and Q4-19.
Table 1 (Dollars in thousands, except per share amounts) | ||||
Revenue |
Net Income |
Net Income per Diluted Share | Non-GAAP Net Income per Diluted Share* | |
Quarterly Comparisons |
|
|
|
|
Current quarter: Q1-20 | $167,235 | $20,477 | $0.12 | $0.11 |
Prior year’s quarter: Q1-19 | $173,484 | $33,104 | $0.19 | $0.17 |
Change: Q1-19 to Q1-20 | (4%) | (38%) | (37%) | (35%) |
Prior quarter: Q4-19 | $169,769 | $80,327 | $0.46 | $0.11 |
Change: Q4-19 to Q1-20 | (1%) | (75%) | (74%) | 0% |
*Non-GAAP net income per diluted share excludes tax adjustments. A reconciliation from GAAP to Non-GAAP is shown in Exhibit 2 of this news release. Notably, Cognex recorded tax adjustments in Q4-19 that together resulted in a discrete tax benefit of $61 million, or $0.35 per share.
“Our Q1 results were in line with our guidance, but that is little comfort in these very challenging times,” said Dr. Robert J. Shillman, Founder and Chairman of Cognex. “The risks to our ongoing success have increased significantly due to the economic impact of the limitations on travel and other restrictive measures mandated by governments around the world in recent weeks. We are fortunate to have an experienced management team, a very strong balance sheet, and a unique corporate culture that will help us navigate through this difficult period and emerge in an even stronger position relative to our competitors, as we have done in prior downturns.”
“Companies around the world, including ours, are facing significant disruptions in their businesses,” said Robert J. Willett, Chief Executive Officer of Cognex. “While some customers are accelerating activity, notably companies in China and in e-commerce fulfillment, many others are struggling to implement capital spending plans or are putting those investments on hold. Cognoids are adapting to this new reality and are moving quickly as they endeavor to support the evolving needs of our customers, manage our supply chain through disruption, and continue our product development efforts.”
Details of the Quarter
Statement of Operations Highlights – First Quarter of 2020
Balance Sheet Highlights – March 29, 2020
Financial Outlook – Q2 2020
Non-GAAP Financial Measures
Analyst Conference Call and Simultaneous Webcast
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 2 million image-based products, representing over $7 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, the expected impact of the COVID-19 outbreak on Cognex’s business and results of operation, customer order rates and timing of related revenue, future product mix, research and development activities, investments, strategic plans, and estimated tax benefits and expenses and other tax matters, 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 impact, duration, and severity of the COVID-19 outbreak, (2) current and future conditions in the global economy, including the impact of the COVID-19 outbreak and the imposition of tariffs or export controls; (3) the loss of, or curtailment of purchases by, a large customer; (4) the reliance on revenue from the consumer electronics or automotive industries; (5) the inability to penetrate the logistics industry and other new markets; (6) the inability to achieve significant international revenue; (7) fluctuations in foreign currency exchange rates and the use of derivative instruments; (8) information security breaches or business system disruptions; (9) the inability to attract and retain skilled employees; (10) the failure to effectively manage our growth; (11) the reliance upon key suppliers to manufacture and deliver critical components for our products; (12) the failure to effectively manage product transitions or accurately forecast customer demand; (13) the inability to design and manufacture high-quality products; (14) the technological obsolescence of current products and the inability to develop new products; (15) the failure to properly manage the distribution of products and services; (16) the inability to protect our proprietary technology and intellectual property; (17) our involvement in time-consuming and costly litigation; (18) the impact of competitive pressures; (19) the challenges in integrating and achieving expected results from acquired businesses, including the recent acquisition of Sualab; (20) potential impairment charges with respect to our investments or for acquired intangible assets or goodwill; and (21) exposure to additional tax liabilities; and the other risks detailed in Cognex reports filed with the SEC, including its Form 10-K for the fiscal year ended December 31, 2019 and Form 10-Q for the fiscal quarter ended March 29, 2020. 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.
Exhibit 1 | |||||||||||
COGNEX CORPORATION Statements of Operations (Unaudited) Dollars in thousands, except per share amounts | |||||||||||
| Three-months Ended | ||||||||||
| March 29, 2020 |
| December 31, 2019 |
| March 31, 2019 | ||||||
|
|
|
|
|
| ||||||
Revenue | $ | 167,235 |
|
| $ | 169,769 |
|
| $ | 173,484 |
|
Cost of revenue (1) | 41,200 |
|
| 44,871 |
|
| 46,284 |
| |||
Gross margin | 126,035 |
|
| 124,898 |
|
| 127,200 |
| |||
Percentage of revenue | 75 | % |
| 74 | % |
| 73 | % | |||
Research, development, and engineering expenses (1) | 35,946 |
|
| 32,991 |
|
| 30,242 |
| |||
Percentage of revenue | 21 | % |
| 19 | % |
| 17 | % | |||
Selling, general, and administrative expenses (1) | 69,138 |
|
| 74,300 |
|
| 66,811 |
| |||
Percentage of revenue | 41 | % |
| 44 | % |
| 39 | % | |||
Operating income | 20,951 |
|
| 17,607 |
|
| 30,147 |
| |||
Percentage of revenue | 13 | % |
| 10 | % |
| 17 | % | |||
Foreign currency gain (loss) | (3,003 | ) |
| 894 |
|
| (248 | ) | |||
Investment and other income | 5,046 |
|
| 4,420 |
|
| 5,832 |
| |||
Income before income tax expense | 22,994 |
|
| 22,921 |
|
| 35,731 |
| |||
Income tax expense (benefit) | 2,517 |
|
| (57,406 | ) |
| 2,627 |
| |||
Net income | $ | 20,477 |
|
| $ | 80,327 |
|
| $ | 33,104 |
|
Percentage of revenue | 12 | % |
| 47 | % |
| 19 | % | |||
|
|
|
|
|
| ||||||
Net income per weighted-average common and common-equivalent share: |
|
|
|
|
| ||||||
Basic | $ | 0.12 |
|
| $ | 0.47 |
|
| $ | 0.19 |
|
Diluted | $ | 0.12 |
|
| $ | 0.46 |
|
| $ | 0.19 |
|
|
|
|
|
|
| ||||||
Weighted-average common and common-equivalent shares outstanding: |
|
|
|
|
| ||||||
Basic | 172,408 |
|
| 171,607 |
|
| 171,098 |
| |||
Diluted | 175,602 |
|
| 175,500 |
|
| 175,607 |
| |||
|
|
|
|
|
| ||||||
Cash dividends per common share | $ | 0.055 |
|
| $ | 0.055 |
|
| $ | 0.050 |
|
Cash and investments per common share | $ | 4.92 |
|
| $ | 4.90 |
|
| $ | 5.03 |
|
Book value per common share | $ | 7.73 |
|
| $ | 7.86 |
|
| $ | 6.93 |
|
|
|
|
|
|
| ||||||
(1) Amounts include stock-based compensation expense, as follows: |
|
|
|
|
| ||||||
Cost of revenue | $ | 354 |
|
| $ | 390 |
|
| $ | 451 |
|
Research, development, and engineering | 5,366 |
|
| 4,115 |
|
| 4,467 |
| |||
Selling, general, and administrative | 9,070 |
|
| 7,642 |
|
| 7,363 |
| |||
Total stock-based compensation expense | $ | 14,790 |
|
| $ | 12,147 |
|
| $ | 12,281 |
|
|
|
|
|
|
|
Exhibit 2 | ||||||||||||
COGNEX CORPORATION Reconciliation of Selected Items from GAAP to Non-GAAP (Unaudited) Dollars in thousands, except per share amounts | ||||||||||||
| Three-months Ended |
| ||||||||||
| March 29, 2020 |
| December 31, 2019 |
| March 31, 2019 |
| ||||||
Adjustment for stock option expense and tax benefit for stock option exercises |
|
|
| |||||||||
Operating income (GAAP) | $ | 20,951 |
|
| $ | 17,607 |
|
| $ | 30,147 |
|
|
Stock-based compensation expense | 14,790 |
|
| 12,147 |
|
| 12,281 |
|
| |||
Operating income (Non-GAAP) | $ | 35,741 |
|
| $ | 29,754 |
|
| $ | 42,428 |
|
|
Percentage of revenue (Non-GAAP) | 21 | % |
| 18 | % |
| 24 | % |
| |||
|
|
|
|
|
|
| ||||||
Net income (GAAP) | $ | 20,477 |
|
| $ | 80,327 |
|
| $ | 33,104 |
|
|
Stock-based compensation expense | 14,790 |
| 12,147 |
| 12,281 |
| ||||||
Tax effect on stock-based compensation expense | (2,564 | ) |
| (1,917 | ) |
| (2,222 | ) |
| |||
Discrete tax benefit related to employee stock-based compensation | (1,680 | ) |
| (1,925 | ) |
| (2,730 | ) |
| |||
Net income (Non-GAAP) | $ | 31,023 |
|
| $ | 88,632 |
|
| $ | 40,433 |
|
|
Percentage of revenue (Non-GAAP) | 19 | % |
| 52 | % |
| 23 | % |
| |||
|
|
|
|
|
|
| ||||||
Net income per diluted weighted-average common and common-equivalent share (GAAP) | $ | 0.12 |
|
| $ | 0.46 |
|
| $ | 0.19 |
|
|
Per share impact of non-GAAP adjustments identified above | 0.06 |
|
| 0.05 |
|
| 0.04 |
|
| |||
Net income per diluted weighted-average common and common-equivalent share (Non-GAAP) | $ | 0.18 |
|
| $ | 0.51 |
|
| $ | 0.23 |
|
|
|
|
|
|
|
|
| ||||||
Diluted weighted-average common and common-equivalent shares outstanding (GAAP) | 175,602 |
|
| 175,500 |
|
| 175,607 |
|
| |||
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
| ||||||
Exclusion of tax adjustments |
|
|
|
|
|
| ||||||
Income before income tax expense (GAAP) | $ | 22,994 |
|
| $ | 22,921 |
|
| $ | 35,731 |
|
|
|
|
|
|
|
|
| ||||||
Income tax expense (benefit) (GAAP) | $ | 2,517 |
|
| $ | (57,406 | ) |
| $ | 2,627 |
|
|
Effective tax rate (GAAP) | 11 | % |
| (250 | )% |
| 7 | % |
| |||
|
|
|
|
|
|
| ||||||
Tax adjustments: |
|
|
|
|
|
| ||||||
Discrete tax benefit related to employee stock options | 1,680 |
|
| 1,925 |
|
| 2,730 |
|
| |||
Discrete tax expense related to migration of acquired IP | — |
|
| (28,528 | ) |
| — |
|
| |||
Discrete tax benefit related to change in tax structure | — |
|
| 87,500 |
|
| — |
|
| |||
Other discrete tax events | (242 | ) |
| 602 |
|
| 3 |
|
| |||
Income tax expense excluding tax adjustments (Non-GAAP) | $ | 3,955 |
|
| $ | 4,093 |
|
| $ | 5,360 |
|
|
Effective tax rate (Non-GAAP) | 17 | % |
| 18 | % |
| 15 | % |
| |||
|
|
|
|
|
|
| ||||||
Net income excluding tax adjustments (Non-GAAP) | $ | 19,039 |
|
| $ | 18,828 |
|
| $ | 30,371 |
|
|
Percentage of revenue (Non-GAAP) | 11 | % |
| 11 | % |
| 18 | % |
| |||
|
|
|
|
|
|
| ||||||
Net income per diluted weighted-average common and common-equivalent share (GAAP) | $ | 0.12 |
|
| $ | 0.46 |
|
| $ | 0.19 |
|
|
Per share impact of non-GAAP adjustments identified above | (0.01 | ) |
| (0.35 | ) |
| (0.02 | ) |
| |||
Net income per diluted weighted-average common and common-equivalent share (Non-GAAP) | $ | 0.11 |
|
| $ | 0.11 |
|
| $ | 0.17 |
|
|
|
|
|
|
|
|
| ||||||
Diluted weighted-average common and common-equivalent shares outstanding (GAAP) | 175,602 |
| 175,500 |
| 175,607 |
| ||||||
|
Exhibit 3 | |||||||
COGNEX CORPORATION Balance Sheets (Unaudited) Dollars in thousands | |||||||
| March 29, 2020 |
| December 31, 2019 | ||||
Assets |
|
|
| ||||
Cash and investments | $ | 845,396 |
|
| $ | 845,353 |
|
Accounts receivable | 100,463 |
|
| 103,447 |
| ||
Inventories | 54,985 |
|
| 60,261 |
| ||
Property, plant, and equipment | 86,702 |
|
| 89,443 |
| ||
Operating lease assets | 17,346 |
|
| 17,522 |
| ||
Goodwill and intangible assets | 280,316 |
|
| 282,935 |
| ||
Deferred tax assets | 450,280 |
|
| 449,519 |
| ||
Other assets | 49,589 |
|
| 37,455 |
| ||
|
|
|
| ||||
Total assets | $ | 1,885,077 |
|
| $ | 1,885,935 |
|
|
|
|
| ||||
Liabilities and Shareholders' Equity |
|
|
| ||||
Accounts payable and accrued expenses | $ | 80,150 |
|
| $ | 70,065 |
|
Deferred revenue and customer deposits | 26,252 |
|
| 14,432 |
| ||
Operating lease liabilities | 17,966 |
|
| 17,973 |
| ||
Income taxes | 99,498 |
|
| 93,009 |
| ||
Deferred tax liabilities | 330,532 |
|
| 332,344 |
| ||
Other liabilities | 3,186 |
|
| 2,402 |
| ||
Shareholders' equity | 1,327,493 |
|
| 1,355,710 |
| ||
|
|
|
| ||||
Total liabilities and shareholders' equity | $ | 1,885,077 |
|
| $ | 1,885,935 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200427005777/en/
Contacts: Susan Conway Investor Relations +1 508-650-3353 Susan.conway@cognex.com
Source: Cognex Corporation