Cognex Corporation (NASDAQ: CGNX) today announced its financial results for the third quarter of 2017 (ended October 1, 2017). Table 1 below shows selected financial data for Q3-17 compared to Q3-16, Q2-17 and the first nine months of 2017 compared to the first nine months of 2016. A reconciliation of certain financial measures from GAAP to non-GAAP is shown in Exhibit 2 of this news release.
Table 1* |
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(Dollars in thousands, except per share amounts) |
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Revenue |
Net Income |
Net Income from |
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Quarterly Comparisons |
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Current quarter: Q3-17 | $259,739 | $102,348 | $1.14 | ||||||
Prior year’s quarter: Q3-16 | $147,952 | $53,675 | $0.61 | ||||||
Change from Q3-16 to Q3-17 | 76% | 91% | 87% | ||||||
Prior quarter: Q2-17 | $172,904 | $56,072 | $0.63 | ||||||
Change from Q2-17 to Q3-17 | 50% | 83% | 81% | ||||||
Year-to-Date Comparisons |
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Nine months ended Oct. 1, 2017 | $567,585 | $204,075 | $2.28 | ||||||
Nine months ended Oct. 2, 2016 | $391,431 | $111,574 | $1.29 | ||||||
Change from first nine months of 2016 to first nine months of 2017 |
45% |
83% |
77% |
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*Table 1 excludes the results of discontinued operations, which relate to the company’s Surface Inspection Systems Division (SISD) that was sold on July 6, 2015.
“What a spectacular quarter!” exclaimed Dr. Robert J. Shillman, Founder and Chairman of Cognex. “Cognex reported record-breaking revenue, net income and earnings per share that far exceeded the prior records set just last quarter. And we were extremely profitable, with operating margin expanding to a record 42% driven by significant high-margin revenue growth. I am proud of Cognoids everywhere for delivering such impressive results."
“Cognex's remarkable performance is due to perseverance,” said Robert J. Willett, Chief Executive Officer of Cognex. "Our ability to capitalize on the widespread adoption of machine vision is the result of many years of hard work by Cognoids around the world. It's gratifying to see our efforts deliver such exceptional results."
Mr. Willett continued, "Our view of the future continues to be positive as more automation processes that include machine vision are needed to perform an increasing array of complex manufacturing tasks. We are investing to take advantage of the substantial potential that we see for our company going forward."
Details of the Quarter
Statement of Operations Highlights - Third Quarter of 2017
Balance Sheet Highlights - October 1, 2017
Financial Outlook - Fourth Quarter of 2017
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 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, the timing for recognition of revenue, expected areas of growth, 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 reliance upon key suppliers to manufacture and deliver critical components for our products; (10) the failure to effectively manage product transitions or accurately forecast customer demand; (11) the inability to design and manufacture high-quality products; (12) the technological obsolescence of current products and the inability to develop new products; (13) the failure to properly manage the distribution of products and services; (14) the inability to protect our proprietary technology and intellectual property; (15) our involvement in time-consuming and costly litigation; (16) the impact of competitive pressures; (17) the challenges in integrating and achieving expected results from acquired businesses; (18) potential impairment charges with respect to our investments or for acquired intangible assets or goodwill; (19) exposure to additional tax liabilities; and (20) the other risks detailed in Cognex reports filed with the SEC, including its Form 10-K for the fiscal year ended December 31, 2016. 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 |
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COGNEX CORPORATION
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Three-months Ended | Nine-months Ended | ||||||||||||||||||||||||
October 1, |
July 2, 2017 |
October 2, |
October 1, |
October 2, |
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Revenue | $ | 259,739 | $ | 172,904 | $ | 147,952 | $ | 567,585 | $ | 391,431 | |||||||||||||||
Cost of revenue (1) | 62,360 | 37,471 | 32,749 | 128,056 | 88,930 | ||||||||||||||||||||
Gross margin | 197,379 | 135,433 | 115,203 | 439,529 | 302,501 | ||||||||||||||||||||
Percentage of revenue | 76 | % | 78 | % | 78 | % | 77 | % | 77 | % | |||||||||||||||
Research, development, and engineering expenses (1) | 26,078 | 23,377 | 18,603 | 72,225 | 58,829 | ||||||||||||||||||||
Percentage of revenue |
10 | % | 14 | % | 13 | % | 13 | % | 15 | % | |||||||||||||||
Selling, general, and administrative expenses (1) | 61,054 | 52,518 | 42,072 | 160,093 | 123,125 | ||||||||||||||||||||
Percentage of revenue | 24 | % | 30 | % | 28 | % | 28 | % | 31 | % | |||||||||||||||
Operating income | 110,247 | 59,538 | 54,528 | 207,211 | 120,547 | ||||||||||||||||||||
Percentage of revenue | 42 | % | 34 | % | 37 | % | 37 | % | 31 | % | |||||||||||||||
Foreign currency gain (loss) | (127 | ) | (184 | ) | (607 | ) | (574 | ) | (377 | ) | |||||||||||||||
Investment and other income | 2,030 | 1,969 | 2,421 | 6,281 | 5,434 | ||||||||||||||||||||
Income before income tax expense | 112,150 | 61,323 | 56,342 | 212,918 | 125,604 | ||||||||||||||||||||
Income tax expense (benefit) | 9,802 | 5,251 | 2,667 | 8,843 | 14,030 | ||||||||||||||||||||
Net income from continuing operations | $ | 102,348 | $ | 56,072 | $ | 53,675 | $ | 204,075 | $ | 111,574 | |||||||||||||||
Percentage of revenue | 39 | % | 32 | % | 36 | % | 36 | % | 29 | % | |||||||||||||||
Net loss from discontinued operations | — | — | — | — | (255 | ) | |||||||||||||||||||
Net income | $ | 102,348 | $ | 56,072 | $ | 53,675 | $ | 204,075 | $ | 111,319 | |||||||||||||||
Percentage of revenue | 39 | % | 32 | % | 36 | % | 36 | % | 28 | % | |||||||||||||||
Basic earnings per weighted-average common and common-equivalent share: | |||||||||||||||||||||||||
Net income from continuing operations | $ | 1.18 | $ | 0.65 | $ | 0.63 | $ | 2.36 | $ | 1.31 | |||||||||||||||
Net loss from discontinued operations | — | — | — | — | — | ||||||||||||||||||||
Net income | $ | 1.18 | $ | 0.65 | $ | 0.63 | $ | 2.36 | $ | 1.31 | |||||||||||||||
Diluted earnings per weighted-average common and common-equivalent share: | |||||||||||||||||||||||||
Net income from continuing operations | $ | 1.14 | $ | 0.63 | $ | 0.61 | $ | 2.28 | $ | 1.29 | |||||||||||||||
Net loss from discontinued operations | — | — | — | — | (0.01 | ) | |||||||||||||||||||
Net income | $ | 1.14 | $ | 0.63 | $ | 0.61 | $ | 2.28 | $ | 1.28 | |||||||||||||||
Weighted-average common and common-equivalent shares outstanding: | |||||||||||||||||||||||||
Basic | 86,617 | 86,639 | 85,460 | 86,526 | 85,167 | ||||||||||||||||||||
Diluted | 89,677 | 89,614 | 87,346 | 89,562 | 86,805 | ||||||||||||||||||||
Cash dividends per common share | $ | 0.085 | $ | 0.085 | $ | 0.075 | $ | 0.245 | $ | 0.22 | |||||||||||||||
Cash and investments per common share | $ | 8.91 | $ | 8.84 | $ | 8.23 | $ | 8.91 | $ | 8.23 | |||||||||||||||
Book value per common share | $ | 13.09 | $ | 12.15 | $ | 11.02 | $ | 13.09 | $ | 11.02 | |||||||||||||||
(1) Amounts include stock option expense, as follows: | |||||||||||||||||||||||||
Cost of revenue | $ | 520 | $ | 454 | $ | 273 | $ | 1,404 | $ | 795 | |||||||||||||||
Research, development, and engineering | 2,765 | 2,715 | 1,366 | 8,090 | 4,942 | ||||||||||||||||||||
Selling, general, and administrative | 4,741 | 4,677 | 2,983 | 13,861 | 10,146 | ||||||||||||||||||||
Total stock option expense | $ | 8,026 | $ | 7,846 | $ | 4,622 | $ | 23,355 | $ | 15,883 |
Exhibit 2 |
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COGNEX CORPORATION
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Three-months Ended | Nine-months Ended | ||||||||||||||||||||||||
October 1, |
July 2, |
October 2, |
October 1, |
October 2, |
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Adjustment for stock option expense and tax benefit for stock option exercises | |||||||||||||||||||||||||
Operating income (GAAP) | $ | 110,247 | $ | 59,538 | $ | 54,528 | $ | 207,211 | $ | 120,547 | |||||||||||||||
Stock option expense | 8,026 | 7,846 | 4,622 | 23,355 | 15,883 | ||||||||||||||||||||
Operating income (Non-GAAP) | $ | 118,273 | $ | 67,384 | $ | 59,150 | $ | 230,566 | $ | 136,430 | |||||||||||||||
Percentage of revenue (Non-GAAP) | 46 | % | 39 | % | 40 | % | 41 | % | 35 | % | |||||||||||||||
Net income from continuing operations (GAAP) | $ | 102,348 | $ | 56,072 | $ | 53,675 | $ | 204,075 | $ | 111,574 | |||||||||||||||
Stock option expense | 8,026 | 7,846 | 4,622 | 23,355 | 15,883 | ||||||||||||||||||||
Tax effect on stock option expense | (2,639 | ) | (2,583 | ) | (1,520 | ) | (7,661 | ) | (5,207 | ) | |||||||||||||||
Discrete tax benefit related to employee stock option exercises | (8,620 | ) | (5,787 | ) | (6,038 | ) | (27,574 | ) | (7,246 | ) | |||||||||||||||
Net income from continuing operations (Non-GAAP) | $ | 99,115 | $ | 55,548 | $ | 50,739 | $ | 192,195 | $ | 115,004 | |||||||||||||||
Percentage of revenue (Non-GAAP) | 38 | % | 32 | % | 34 | % | 34 | % | 29 | % | |||||||||||||||
Net income from continuing operations per diluted weighted-average common and common-equivalent share (GAAP) | $ | 1.14 | $ | 0.63 | $ | 0.61 | $ | 2.28 | $ | 1.29 | |||||||||||||||
Share impact of non-GAAP adjustments identified above | (0.03 | ) | (0.01 | ) | (0.03 | ) | (0.13 | ) | 0.03 | ||||||||||||||||
Net income from continuing operations per diluted weighted-average common and common-equivalent share (Non-GAAP) | $ | 1.11 | $ | 0.62 | $ | 0.58 | $ | 2.15 | $ | 1.32 | |||||||||||||||
Diluted weighted-average common and common-equivalent shares outstanding (GAAP) | 89,677 | 89,614 | 87,346 | 89,562 | 86,805 | ||||||||||||||||||||
Exclusion of tax adjustments | |||||||||||||||||||||||||
Income before income tax expense (GAAP) | $ | 112,150 | $ | 61,323 | $ | 56,342 | $ | 212,918 | $ | 125,604 | |||||||||||||||
Income tax expense (benefit) (GAAP) | $ | 9,802 | $ | 5,251 | $ | 2,667 | $ | 8,843 | $ | 14,030 | |||||||||||||||
Effective tax rate (GAAP) | 9 | % | 9 | % | 5 | % | 4 | % | 11 | % | |||||||||||||||
Tax adjustments: | |||||||||||||||||||||||||
Discrete tax benefit related to employee stock option exercises | (8,620 | ) | (5,787 | ) | (6,038 | ) | (27,574 | ) | (7,246 | ) | |||||||||||||||
Other discrete tax events | (1,765 | ) | — | (1,436 | ) | (1,908 | ) | (1,332 | ) | ||||||||||||||||
Income tax expense excluding tax adjustments (Non-GAAP) | $ | 20,187 | $ | 11,038 | $ | 10,141 | $ | 38,325 | $ | 22,608 | |||||||||||||||
Effective tax rate (Non-GAAP) | 18 | % | 18 | % | 18 | % | 18 | % | 18 | % | |||||||||||||||
Net income from continuing operations excluding tax adjustments (Non-GAAP) | $ | 91,963 | $ | 50,285 | $ | 46,201 | $ | 174,593 | $ | 102,996 | |||||||||||||||
Percentage of revenue (Non-GAAP) | 35 | % | 29 | % | 31 | % | 31 | % | 26 | % | |||||||||||||||
Net income from continuing operations per diluted weighted-average common and common-equivalent share (GAAP) | $ | 1.14 | $ | 0.63 | $ | 0.61 | $ | 2.28 | $ | 1.29 | |||||||||||||||
Share impact of non-GAAP adjustments identified above | (0.11 | ) | (0.07 | ) | (0.08 | ) | (0.33 | ) | (0.10 | ) | |||||||||||||||
Net income from continuing operations per diluted weighted-average common and common-equivalent share (Non-GAAP) | $ | 1.03 | $ | 0.56 | $ | 0.53 | $ | 1.95 | $ | 1.19 | |||||||||||||||
Diluted weighted-average common and common-equivalent shares outstanding (GAAP) | 89,677 | 89,614 | 87,346 | 89,562 | 86,805 | ||||||||||||||||||||
Exhibit 3 |
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COGNEX CORPORATION
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October 1, 2017 | December 31, 2016 | ||||||||
Assets | |||||||||
Cash and investments | $ | 771,111 | $ | 745,170 | |||||
Accounts receivable | 121,976 | 55,438 | |||||||
Unbilled revenue | 51,612 | 2,217 | |||||||
Inventories | 48,061 | 26,984 | |||||||
Property, plant, and equipment | 65,957 | 53,992 | |||||||
Goodwill and intangible assets | 127,635 | 103,592 | |||||||
Other assets | 72,165 | 51,211 | |||||||
Total assets | $ | 1,258,517 | $ | 1,038,604 | |||||
Liabilities and Shareholders' Equity | |||||||||
Accounts payable and accrued liabilities | $ | 83,401 | $ | 52,369 | |||||
Deferred revenue and customer deposits | 16,072 | 8,211 | |||||||
Income taxes | 15,616 | 10,554 | |||||||
Other liabilities | 9,905 | 4,871 | |||||||
Shareholders' equity | 1,133,523 | 962,599 | |||||||
Total liabilities and shareholders' equity | $ | 1,258,517 | $ | 1,038,604 |
Exhibit 4 |
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COGNEX CORPORATION
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Three-months Ended | Nine-months Ended | ||||||||||||||||||||||||
October 1, |
July 2, |
October 2, |
October 1, |
October 2, |
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Revenue | $ | 259,739 | $ | 172,904 | $ | 147,952 | $ | 567,585 | $ | 391,431 | |||||||||||||||
Revenue by geography: | |||||||||||||||||||||||||
Europe | 56 | % | 36 | % | 50 | % | 44 | % | 46 | % | |||||||||||||||
Americas | 20 | % | 33 | % | 25 | % | 26 | % | 29 | % | |||||||||||||||
Greater China | 13 | % | 14 | % | 13 | % | 14 | % | 13 | % | |||||||||||||||
Other Asia | 11 | % | 17 | % | 12 | % | 16 | % | 12 | % | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
Revenue by market: | |||||||||||||||||||||||||
Factory automation | 97 | % | 96 | % | 96 | % | 96 | % | 95 | % | |||||||||||||||
Semiconductor and electronics capital equipment | 3 | % | 4 | % | 4 | % | 4 | % | 5 | % | |||||||||||||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
View source version on businesswire.com: http://www.businesswire.com/news/home/20171030006210/en/
Cognex Corporation
Susan Conway, 508-650-3353
Senior Director
of Investor Relations
[email protected]