2
FORWARD-LOOKING STATEMENTSCertain statements made in this presentation and oral statements made by Cognex® that 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 conditions and trends, future financial performance, customer order rates and the timing of related revenue, expected areas of growth, emerging markets, future product mix, research and development activities, investments, strategic plans, expected benefits from acquisitions, dividends, stock repurchases, and 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) current and future conditions in the global economy, including the imposition of tariffs or exportcontrols and the impact of the coronavirus outbreak; (2) the loss of, or curtailment of purchases by, a large customer; (3) the reliance on revenue from the consumer electronics or automotive industries; (4) the inability to penetrate the logistics industry and other 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 failure to effectively manage our growth; (10) the reliance upon key suppliers to manufacture and deliver critical components for our products; (11) the failure to effectively manage product transitions or accurately forecast customer demand; (12) the inability to design and manufacture high-quality products; (13) the technological obsolescence of current products and the inability to develop new products; (14) the failure to properly manage the distribution of products and services; (15) the inability to protect our proprietary technology and intellectual property; (16) our involvement in time-consuming and costly litigation; (17) the impact of competitive pressures; (18) the challenges in integrating and achieving expected results from acquired businesses, including the recent acquisition of Sualab; (19) potential impairment charges with respect to our investments or for acquired intangible assets or goodwill; (20) 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. 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.
3
MILLION2019 REVENUE
74% OVER 39YEARS IN THE BUSINESS
2,000,000+SYSTEMS SHIPPED
20%GROSS MARGIN
OPERATING MARGIN
6
Our culture is part of a virtuous circle, attracting excellent engineers, (CLICK) who develop leading technology, which drives sales growth, (CLICK) and which in turn helps preserve and enhances our culture. Even in down
Engineering Excellence
Sales Growth
Culture
13
MACHINE VISION IS A GREAT MARKET
360 MILLIONFACTORY WORKERS WORLDWIDE
35 MILLIONVISUAL INSPECTORS
Source: Estimates based on internal data and data from International Labor Organization & World Bank
14
P R O D U C T S AC R O S S
ALLINDUSTRIES
A R E M A D E B E T T E R A N D AT L O W E R C O S T W I T H
COGNEX VISION
16
CognexShare
30% 20% >10% >5% <5% <5% ~20%
Estimated Long-term
CAGR10% 10% 15% 15% 10% 10% 12%
Source: Cognex estimates based on full year 2018 market data
COGNEX’S $4.2 BILLION SERVED MARKET
20%
0%
60%
40%
80%
100%
ID Factory Automation LifeSciences
3DLogistics MobileTerminals
$1,400M $1,000M $1,000M $400M $200M $200M
2D Vision
Projected
Market Growth
Low DoubleDigits
Total
Others
Cognex
18
Broadest portfolio of industrial image-basedbarcode readers
Read rates matter
Strong prospects for continued share gain
ID FACTORY AUTOMATION
19
Market undergoing rapid change
Revenue >15% of company total in 2019
Many new applications in both vision and ID
LOGISTICS
20
New snap-shot sensing platforms
Powerful vision tools, including PatMax 3D
Target growth in excess of long-term market rate
3D VISION
21
Highly regulated, non-cyclical market
Long product life cycle
20 design wins in 2019
Consistent, stable, fast growing ongoing revenue
LIFE SCIENCES
22
Target market ripe for disruption
Unique integration of smartphones and high-performance vision tools
MOBILE TERMINALS
23
DEEP LEARNING
Neural network trained by example
Specific to industrialmachine vision
Human-like judgement for ambiguous problems
25
$0
$100
$200
$300
$400
$500
$600
$700
$800
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
COGNEX 10-YEAR REVENUE*
CAGR
3 Year 11%
5 Year 9%
10 Year 18%
* From continuing operations.
Dollars in millions
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2019 INCOME STATEMENT(AS REPORTED UNDER GAAP)
Dollars in thousands, except per share amounts
2019% of
Revenue 2018% of
Revenue%
Change
Revenue $725,625 100 % $806,338 100 % (10) %
Gross Margin 535,871 74 600,286 74 (11)
R, D & E 119,427 16 116,445 14 3
S, G & A 273,842 38 262,699 33 4
Operating Income 142,602 20 221,142 27 (36)
Net Income 203,865 28 219,267 27 (7)
Earnings Per Share 1.16 1.24 (6)
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2019 INCOME STATEMENT(NON-GAAP)
Dollars in thousands, except per share amounts
2019% of
Revenue 2018% of
Revenue%
Change
Revenue $725,625 100 % $806,338 100 % (10) %
Gross Margin 535,871 74 600,286 74 (11)
R, D & E 119,427 16 116,445 14 3
S, G & A 273,842 38 262,699 33 4
Operating Income 142,602 20 221,142 27 (36)
Net Income* 136,489 19 201,144 25 (32)
Earnings Per Share* 0.78 1.13 (31)
*Excludes tax adjustments. See reconciliation of GAAP to non-GAAP in Cognex earnings release issued on 2/13/20 at investor.cognex.com
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Q4 2019 INCOME STATEMENT(NON-GAAP)
Dollars in thousands, except per share amounts
Q42019
% of Revenue
Q42018
% of Revenue
% Change
Revenue $169,769 100 % $193,286 100 % (12) %
Gross Margin 124,898 74 140,461 73 (11)
R, D & E 32,991 19 28,781 15 15
S, G & A 74,300 44 66,433 34 12
Operating Income 17,607 10 45,247 23 (61)
Net Income* 18,828 11 45,051 23 (58)
Earnings Per Share* 0.11 0.26 (58)
*Excludes tax adjustments. See reconciliation of GAAP to non-GAAP in Cognex earnings release issued on 2/13/20 at investor.cognex.com
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Q4 2019 BALANCE SHEET
Assets 12/31/2019 12/31/2018
Cash and Investments $845,353 $797,599
Accounts Receivable 103,447 119,172
Inventories 60,261 83,282
Deferred Tax Assets 449,519 28,660
Other Assets 427,355 260,954
Total Assets $1,885,935 $1,289,667
Liabilities and Shareholders’ Equity
Accounts Payable and Accrued Liabilities $70,065 $76,450
Income Taxes and Deferred Tax Liabilities 425,353 64,243
Other Liabilities 34,807 13,711
Total Shareholders’ Equity 1,355,710 1,135,263
Total Liabilities and Equity $1,885,935 $1,289,667
Dollars in thousands
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