NOVEMBER 8, 2007--Cognex (Natick, MA, USA;www.cognex.com) has announced its financial results for the third quarter, ended September 30, 2007. "I am pleased to report that earnings for the third quarter of 2007 are much better than we expected when we gave guidance to investors in August, and that we nearly doubled the earnings reported for the prior quarter on essentially the same revenue level," said Robert J. Shillman, Cognex chairman and chief executive officer. "These positive results were due to several items in the quarter, including a higher gross margin due to product mix, lower than planned sales and marketing expenses and professional fees, a discrete tax benefit, and a foreign exchange gain."
Shillman continued, "In addition to the higher than expected earnings we reported for the third quarter, I am also pleased to report that some of the sales and marketing initiatives we put into place earlier in the year are starting to gain traction. This is likely to lead to higher revenue in the fourth quarter, both on a sequential basis and year-on-year."
Revenue for the third quarter of 2007 decreased 6% from the third quarter of 2006 due to lower sales to the semiconductor and electronics and surface inspection markets, which more than offset an increase in sales to the factory automation market, primarily in Europe. On a sequential basis, revenue was flat as higher revenue from the Semiconductor and Electronics market and, to a lesser extent, the factory automation market, offset lower surface inspection revenue. The increase in semiconductor and electronics revenue is primarily due to an adjustment, which was reported by Cognex on August 15, 2007, that reduced second quarter revenue by $1,060,000 to correct for an overstatement in prior periods.
Cognex's financial position at September 30, 2007, was very strong, with more than $265,000,000, or $6.13 per outstanding share, in cash and investments and no debt. In the first nine months of 2007, Cognex generated positive cash flow from operations of approximately $35,000,000, paid out over $11,000,000 in dividends to shareholders, and spent over $32,600,000 to repurchase nearly 1,430,000 shares of its common stock on the open market.
For the fourth quarter of 2007, Cognex expects revenue to be between $59 million and $62 million. Gross margin, including estimated stock option expense of $300,000, is expected to be in the low-to-mid-70% range. Operating expenses, including estimated stock option expense of $2,400,000, are expected to increase by between 5% and 10% on a sequential basis. The effective tax rate is expected to be 26%. As a result of the above, earnings for the fourth quarter of 2007 are expected to be between $0.17 and $0.23 per diluted share.
For more information, go towww.cognex.com.
