EX-99.1 2 proforma.htm EXHIBIT 99.1 ProForma


COGNEX CORPORATION
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

The following unaudited pro forma consolidated financial statements of Cognex Corporation (the "Company") have been prepared to reflect the sale of assets related to the Company's Surface Inspection Systems Division ("SISD") to AMETEK, Inc. ("Asset Sale"), as further described in Item 2.01 of the Company's Current Report on Form 8-K filed herewith. The unaudited pro forma consolidated financial statements give effect to the disposition of SISD to be accounted for as a discontinued operation. The unaudited pro forma consolidated Balance Sheet has been prepared as of April 5, 2015 and gives effect to the disposition of SISD as if the Asset Sale occurred on April 5, 2015. The unaudited pro forma consolidated Statements of Operations have been prepared for the three-month period ended April 5, 2015 and for the twelve-month periods ended December 31, 2014, December 31, 2013, and December 31, 2012. The unaudited pro forma consolidated Statements of Operations give effect to the disposition of SISD as if the Asset Sale occurred on January 1, 2012.

The unaudited pro forma consolidated financial statements presented are based on the assumptions and adjustments described in the accompanying notes and reflect the estimated net proceeds of the Asset Sale as an increase to cash and cash equivalents. The actual effect of the Asset Sale on the business, financial condition, and results of operations of the Company, due to this and other factors, including those set forth in the Company's most recent Annual Report on Form 10-K, could differ materially from the pro forma adjustments described herein. However, management believes that the assumptions used and the adjustments made in this presentation are reasonable under the circumstances and information available at this time.

The unaudited pro forma consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the operating results or the financial position that would have been achieved had the Asset Sale been consummated as of the dates indicated or of the results that may be obtained in the future. The Company cautions readers not to place undue reliance upon these statements, which speak only as of the date made, and the Company makes no representations regarding the information set forth below or its ultimate performance compared thereto. The Company disclaims any obligation to subsequently revise forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such statements are made. These unaudited pro forma consolidated financial statements and the accompanying notes should be read together with the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and the Company's Quarterly Report on Form 10-Q for the three-month period ended April 5, 2015.







1


COGNEX CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

 
Three-months Ended April 5, 2015
 
Cognex Corporation
 
Disposed Business (a)
 
Pro Forma Adjustments
 
Pro Forma Cognex Corporation
 
 
 
 
Revenue
 
 
 
 
 
 
 
Product
$
105,775

 
$
(8,281
)
 
$
—

 
$
97,494

Service
7,659

 
(3,780
)
 
—

 
3,879

 
113,434

 
(12,061
)
 
—

 
101,373

Cost of revenue
 
 
 
 
 
 
 
Product
23,634

 
(3,575
)
 
43

(c)
20,102

Service
4,320

 
(2,087
)
 
9

(c)
2,242

 
27,954

 
(5,662
)
 
52

 
22,344

Gross margin
 
 
 
 
 
 
 
Product
82,141

 
(4,706
)
 
(43
)
 
77,392

Service
3,339

 
(1,693
)
 
(9
)
 
1,637

 
85,480

 
(6,399
)
 
(52
)
 
79,029

Research, development, and engineering expenses
18,076

 
(1,179
)
 
89

(c)
16,986

Selling, general, and administrative expenses
43,487

 
(3,607
)
 
53

(c)
39,933

Operating income
23,917

 
(1,613
)
 
(194
)
 
22,110

Nonoperating income
945

 
—

 
—

 
945

Income before income tax expense
24,862

 
(1,613
)
 
(194
)
 
23,055

Income tax expense
4,360

 
(536
)
(b)
(73
)
(b)
3,751

Net income
$
20,502

 
$
(1,077
)
 
$
(121
)
 
$
19,304

 
 
 
 
 
 
 
 
Earnings per weighted-average common and common-equivalent share:
Basic
$
0.24

 


 


 
$
0.22

Diluted
$
0.23

 


 


 
$
0.22

 
 
 
 
 
 
 
 
Weighted-average common and common-equivalent shares outstanding:
Basic
86,764

 
 
 
 
 
86,764

Diluted
88,749

 
 
 
 
 
88,749












2



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

3


COGNEX CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

 
Twelve-months Ended December 31, 2014
 
Cognex Corporation
 
Disposed Business (a)
 
Pro Forma Adjustments
 
Pro Forma Cognex Corporation
 
 
 
 
Revenue
 
 
 
 
 
 
 
Product
$
451,066

 
$
(42,049
)
 
$
—

 
$
409,017

Service
35,204

 
(17,772
)
 
—

 
17,432

 
486,270

 
(59,821
)
 
—

 
426,449

Cost of revenue
 
 
 
 
 
 
 
Product
101,448

 
(18,367
)
 
185

(c)
83,266

Service
19,572

 
(8,814
)
 
43

(c)
10,801

 
121,020

 
(27,181
)
 
228

 
94,067

Gross margin
 
 
 
 
 
 
 
Product
349,618

 
(23,682
)
 
(185
)
 
325,751

Service
15,632

 
(8,958
)
 
(43
)
 
6,631

 
365,250

 
(32,640
)
 
(228
)
 
332,382

Research, development, and engineering expenses
59,920

 
(4,479
)
 
390

(c)
55,831

Selling, general, and administrative expenses
161,667

 
(13,662
)
 
694

(c)
148,699

Operating income
143,663

 
(14,499
)
 
(1,312
)
 
127,852

Nonoperating income
3,734

 
—

 
—

 
3,734

Income before income tax expense
147,397

 
(14,499
)
 
(1,312
)
 
131,586

Income tax expense
25,912

 
(4,757
)
(b)
(492
)
(b)
20,663

Net income
$
121,485

 
$
(9,742
)
 
$
(820
)
 
$
110,923

 
 
 
 
 
 
 
 
Earnings per weighted-average common and common-equivalent share:
Basic
$
1.40

 


 


 
$
1.28

Diluted
$
1.36

 


 


 
$
1.25

 
 
 
 
 
 
 
 
Weighted-average common and common-equivalent shares outstanding:
Basic
86,858

 
 
 
 
 
86,858

Diluted
89,071

 
 
 
 
 
89,071












4



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

5


COGNEX CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

 
Twelve-months Ended December 31, 2013
 
Cognex Corporation
 
Disposed Business (a)
 
Pro Forma Adjustments
 
Pro Forma Cognex Corporation
 
 
 
 
Revenue
 
 
 
 
 
 
 
Product
$
326,786

 
$
(28,600
)
 
$
—

 
$
298,186

Service
27,100

 
(17,635
)
 
—

 
9,465

 
353,886

 
(46,235
)
 
—

 
307,651

Cost of revenue
 
 
 
 
 
 
 
Product
71,893

 
(13,196
)
 
168

(c)
58,865

Service
12,187

 
(8,196
)
 
33

(c)
4,024

 
84,080

 
(21,392
)
 
201

 
62,889

Gross margin
 
 
 
 
 
 
 
Product
254,893

 
(15,404
)
 
(168
)
 
239,321

Service
14,913

 
(9,439
)
 
(33
)
 
5,441

 
269,806

 
(24,843
)
 
(201
)
 
244,762

Research, development, and engineering expenses
48,087

 
(4,114
)
 
342

(c)
44,315

Selling, general, and administrative expenses
135,351

 
(12,576
)
 
734

(c)
123,509

Operating income
86,368

 
(8,153
)
 
(1,277
)
 
76,938

Nonoperating income
1,518

 
—

 
—

 
1,518

Income before income tax expense
87,886

 
(8,153
)
 
(1,277
)
 
78,456

Income tax expense
14,313

 
(2,561
)
(b)
(479
)
(b)
11,273

Net income
$
73,573

 
$
(5,592
)
 
$
(798
)
 
$
67,183

 
 
 
 
 
 
 
 
Earnings per weighted-average common and common-equivalent share:
Basic
$
0.85

 


 


 
$
0.77

Diluted
$
0.83

 


 


 
$
0.76

 
 
 
 
 
 
 
 
Weighted-average common and common-equivalent shares outstanding:
Basic
86,946

 
 
 
 
 
86,946

Diluted
88,901

 
 
 
 
 
88,901












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

6


COGNEX CORPORATION
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

 
Twelve-months Ended December 31, 2012
 
Cognex Corporation
 
Disposed Business (a)
 
Pro Forma Adjustments
 
Pro Forma Cognex Corporation
 
 
 
 
Revenue
 
 
 
 
 
 
 
Product
$
295,588

 
$
(32,280
)
 
$
—

 
$
263,308

Service
28,691

 
(18,303
)
 
—

 
10,388

 
324,279

 
(50,583
)
 
—

 
273,696

Cost of revenue
 
 
 
 
 
 
 
Product
65,432

 
(14,613
)
 
151

(c)
50,970

Service
14,063

 
(8,900
)
 
28

(c)
5,191

 
79,495

 
(23,513
)
 
179

 
56,161

Gross margin
 
 
 
 
 
 
 
Product
230,156

 
(17,667
)
 
(151
)
 
212,338

Service
14,628

 
(9,403
)
 
(28
)
 
5,197

 
244,784

 
(27,070
)
 
(179
)
 
217,535

Research, development, and engineering expenses
41,549

 
(3,876
)
 
302

(c)
37,975

Selling, general, and administrative expenses
119,828

 
(11,813
)
 
655

(c)
108,670

Operating income
83,407

 
(11,381
)
 
(1,136
)
 
70,890

Nonoperating income
3,223

 
—

 
—

 
3,223

Income before income tax expense
86,630

 
(11,381
)
 
(1,136
)
 
74,113

Income tax expense
18,532

 
(3,720
)
(b)
(426
)
(b)
14,386

Net income
$
68,098

 
$
(7,661
)
 
$
(710
)
 
$
59,727

 
 
 
 
 
 
 
 
Earnings per weighted-average common and common-equivalent share:
Basic
$
0.79

 


 


 
$
0.70

Diluted
$
0.78

 


 


 
$
0.68

 
 
 
 
 
 
 
 
Weighted-average common and common-equivalent shares outstanding:
Basic
85,666

 
 
 
 
 
85,666

Diluted
87,280

 
 
 
 
 
87,280












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

7


COGNEX CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)

 
April 5, 2015
ASSETS
Cognex Corporation
 
Disposed Business
 
Pro Forma Cognex Corporation
Current assets:
 
 
 
 
 
Cash and cash equivalents
$
36,047

 
$
149,992

(e)
$
186,039

Short-term investments
142,343

 
 
 
142,343

Accounts receivable, net
56,264

 
(10,706
)
(d)
45,558

Inventories
48,458

 
(6,520
)
(d)
41,938

Deferred income taxes
8,990

 
 
 
8,990

Prepaid expenses and other current assets
17,857

 
(4,948
)
(d)
12,909

Total current assets
309,959

 
127,818

 
437,777

Long-term investments
370,433

 
 
 
370,433

Property, plant, and equipment, net
48,692

 
(1,750
)
(d)
46,942

Deferred income taxes
16,349

 
 
 
16,349

Intangible assets, net
9,606

 
(946
)
(d)
8,660

Goodwill
81,689

 
(4,301
)
(d)
77,388

Other assets
1,617

 
(31
)
(d)
1,586

 
$
838,345

 
$
120,790

 
$
959,135

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
Current liabilities:
 
 
 
 
 
Accounts payable
$
13,295

 
$
(1,083
)
(d)
$
12,212

Accrued expenses
32,240

 
(4,071
)
(d)
28,169

Accrued income taxes
928

 
49,852

(f)
50,780

Deferred revenue
20,447

 
(8,103
)
(d)
12,344

Total current liabilities
66,910

 
36,595

 
103,505

Reserve for income taxes
4,372

 
—

 
4,372

Commitments and contingencies
 
 
 
 
 
Shareholders’ equity:
 
 
 
 
 
Common stock, $.002 par value –
Authorized: 140,000 shares, issued and outstanding: 87,128
174

 
—

 
174

Additional paid-in capital
272,070

 
1,107

(h)
273,177

Retained earnings
544,448

 
83,088

(g)
627,536

Accumulated other comprehensive loss, net of tax
(49,629
)
 
—

 
(49,629
)
Total shareholders’ equity
767,063

 
84,195

 
851,258

 
$
838,345

 
$
120,790

 
$
959,135










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

8


COGNEX CORPORATION
NOTES TO THE PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


a.
Represents the results of operations of SISD based upon U.S. GAAP for the period presented.

b.
Represents the adjustment to the Company's income tax expense resulting from the pro forma impact of the disposition, but excludes any tax expense directly attributable to the gain on the transaction.

c.
Represents the elimination of any non-recurring transaction costs incurred in connection with the Asset Sale. Additional professional fees will be incurred in connection with the closing of the Asset Sale. Also includes the reallocation of corporate overhead as if the division was sold as of the beginning of the period presented.

d.
Represents the elimination of the major assets and liabilities transferred to AMETEK, Inc. in the Asset Sale as if the sale had occurred on April 5, 2015.

e.
Includes the estimated net proceeds on the Asset Sale of $154.5 million, less $4.5 million of transaction costs.

f.
Represents the estimated income taxes on the gain from the Asset Sale at the statutory rate.

g.
Includes the estimated gain on the Asset Sale, which is reflective of the estimated closing balance sheet, transaction costs, and income taxes to be incurred on the transaction.

h.
Represents stock-based compensation expense resulting from the accelerated vesting of stock option grants.





9