cgnx-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended March 31, 2024 or


☐			Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __________ to __________

Commission File Number 001-34218

COGNEX CORPORATION


(Exact name of registrant as specified in its charter)


Massachusetts						04-2713778
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

One Vision Drive

Natick, Massachusetts 01760-2059

(508) 650-3000


(Address, including zip code, and telephone number, including area code, of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.002 per share	CGNX	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

As of March 31, 2024, there were 171,662,056 shares of Common Stock, $.002 par value per share, of the registrant outstanding.

INDEX


PART I	FINANCIAL INFORMATION	3

Item 1.	Financial Statements (interim periods unaudited)	3
	Consolidated Statements of Operations for the three-month periods ended March 31, 2024 and April 2, 2023	3
	Consolidated Statements of Comprehensive Income (Loss) for the three-month periods ended March 31, 2024 and April 2, 2023	4
	Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	5
	Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2024 and April 2, 2023	6
	Consolidated Statements of Shareholders’ Equity for the three-month periods ended March 31, 2024 and April 2, 2023	7
	Notes to Consolidated Financial Statements	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	29

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults Upon Senior Securities	30

Item 4.	Mine Safety Disclosures	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

	Signatures	32

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)


	Three-months Ended
	March 31, 2024		April 2, 2023
	(unaudited)
Revenue	$	210,797	$	201,124
Cost of revenue	68,860		57,384
Gross margin	141,937		143,740
Research, development, and engineering expenses	37,105		38,542
Selling, general, and administrative expenses	90,628		83,037

Operating income	14,204		22,161
Foreign currency gain (loss)	46		394
Investment income	3,120		3,587
Other income (expense)	196		73
Income before income tax expense	17,566		26,215
Income tax expense	5,544		600
Net income	$	12,022	$	25,615

Net income per weighted-average common and common-equivalent share:
Basic	$	0.07	$	0.15
Diluted	$	0.07	$	0.15

Weighted-average common and common-equivalent shares outstanding:
Basic	171,692		172,624
Diluted	172,594		173,903

Cash dividends per common share	$	0.075	$	0.070

The accompanying notes are an integral part of these consolidated financial statements.

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)


	Three-months Ended
	March 31, 2024		April 2, 2023
	(unaudited)
Net income	$	12,022	$	25,615
Other comprehensive income (loss), net of tax:





Available-for-sale investments:
Net unrealized gain (loss), net of tax of $117 and $1,858 in the three-month periods, respectively	359		5,426

Reclassification of net realized (gain) loss on the sale of available-for-sale investments into current operations	(2)		—
Net change related to available-for-sale investments	357		5,426

Foreign currency translation adjustments:
Foreign currency translation adjustments	(16,156)		(359)
Net change related to foreign currency translation adjustments	(16,156)		(359)

Other comprehensive income (loss), net of tax	(15,799)		5,067
Total comprehensive income (loss)	$	(3,777)	$	30,682

The accompanying notes are an integral part of these consolidated financial statements.

COGNEX CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands)


	March 31, 2024		December 31, 2023
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	138,859	$	202,655
Current investments, amortized cost of $141,876 and $132,799 in 2024 and 2023, respectively, allowance for credit losses of $0 in 2024 and 2023	139,334		129,392
Accounts receivable, allowance for credit losses of $1,339 and $583 in 2024 and 2023, respectively	138,556		114,164
Unbilled revenue	2,737		2,402
Inventories	170,871		162,285
Prepaid expenses and other current assets	71,173		68,099
Total current assets	661,530		678,997
Non-current investments, amortized cost of $285,376 and $250,790 in 2024 and 2023, respectively, allowance for credit losses of $0 in 2024 and 2023	278,426		244,230
Property, plant, and equipment, net	104,111		105,849
Operating lease assets	74,113		75,115
Goodwill	386,157		393,181
Intangible assets, net	105,054		112,952
Deferred income taxes	397,563		400,400
Other assets	6,279		7,088
Total assets	$	2,013,233	$	2,017,812

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	27,459	$	21,454
Accrued expenses	70,429		72,374
Accrued income taxes	40,433		16,907
Deferred revenue and customer deposits	39,983		31,525
Operating lease liabilities	9,798		9,624
Total current liabilities	188,102		151,884
Non-current operating lease liabilities	67,367		68,977
Deferred income taxes	239,538		246,877
Reserve for income taxes	28,144		26,685
Non-current accrued income taxes	—		18,338
Other liabilities	893		299
Total liabilities	524,044		513,060

Commitments and contingencies (Note 10)
Shareholders’ equity:
Preferred stock, $.01 par value – Authorized: 400 shares in 2024 and 2023, respectively; no shares issued and outstanding	—		—
Common stock, $.002 par value – Authorized: 300,000 shares in 2024 and 2023, respectively; issued and outstanding: 171,662 and 171,599 shares in 2024 and 2023, respectively	343		343
Additional paid-in capital	1,047,643		1,037,202
Retained earnings	502,338		512,543
Accumulated other comprehensive loss, net of tax	(61,135)		(45,336)
Total shareholders’ equity	1,489,189		1,504,752
Total liabilities and shareholders' equity	$	2,013,233	$	2,017,812

The accompanying notes are an integral part of these consolidated financial statements.

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Three-months Ended
	March 31, 2024		April 2, 2023
	(unaudited)
Cash flows from operating activities:
Net income	$	12,022	$	25,615
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense	13,302		16,579
Depreciation of property, plant, and equipment	5,279		3,986

Amortization of intangible assets	2,813		942
Excess and obsolete inventory charges	471		788
Fair value adjustment on acquired inventories (Note 17)	1,224		—

Amortization of discounts or premiums on investments	306		700
Realized (gain) loss on sale of investments	(2)		—


Change in deferred income taxes	(3,333)		(10,656)
Change in operating assets and liabilities:
Accounts receivable	(25,669)		(18,455)
Unbilled revenue	(347)		(173)
Inventories	(10,938)		(5,338)

Prepaid expenses and other current assets	(3,395)		231
Accounts payable	7,398		(192)
Accrued expenses	(470)		(9,942)
Accrued income taxes	5,258		4,721
Deferred revenue and customer deposits	8,737		17,003
Other	987		1,744
Net cash provided by (used in) operating activities	13,643		27,553
Cash flows from investing activities:
Purchases of investments	(233,726)		(46,480)
Maturities and sales of investments	189,758		46,199
Purchases of property, plant, and equipment	(4,061)		(5,507)
Net payments related to business acquisitions (Note 17)	(994)		—


Net cash provided by (used in) investing activities	(49,023)		(5,788)
Cash flows from financing activities:
Net payments from issuance of common stock under stock plans	(2,861)		(3,055)
Repurchase of common stock	(9,339)		(24,178)
Payment of dividends	(12,888)		(12,091)

Net cash provided by (used in) financing activities	(25,088)		(39,324)
Effect of foreign exchange rate changes on cash and cash equivalents	(3,328)		356
Net change in cash and cash equivalents	(63,796)		(17,203)
Cash and cash equivalents at beginning of period	202,655		181,374
Cash and cash equivalents at end of period	$	138,859	$	164,171

The accompanying notes are an integral part of these consolidated financial statements.

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Par Value
Balance as of December 31, 2023	171,599	$	343	$	1,037,202	$	512,543	$	(45,336)	$	1,504,752
Net issuance of common stock under stock plans	294	—		(2,861)		—		—		(2,861)
Repurchase of common stock	(231)	—		—		(9,339)		—		(9,339)
Stock-based compensation expense	—	—		13,302		—		—		13,302
Payment of dividends ($0.075 per common share)	—	—		—		(12,888)		—		(12,888)
Net income	—	—		—		12,022		—		12,022


Net unrealized gain (loss) on available-for-sale investments, net of tax of $117	—	—		—		—		359		359

Reclassification of net realized (gain) loss on the sale of available-for-sale investments	—	—		—		—		(2)		(2)
Foreign currency translation adjustment	—	—		—		—		(16,156)		(16,156)
Balance as of March 31, 2024 (unaudited)	171,662	$	343	$	1,047,643	$	502,338	$	(61,135)	$	1,489,189

SEC Form 10-Q filed by Cognex Corporation