NATICK, MA, USA April 21, 2009
Cognex Corporation Announces Additional Cost-Cutting Measures
NATICK, MA, April 21, 2009 — Cognex Corporation (NASDAQ: CGNX) today announced that due to the dismal global business environment it has taken steps to cut expenses by an additional $15 million on an annualized basis. These actions, which augment those taken by the company in November of 2008, include cuts in certain executive salaries, the elimination of approximately 85 employees and contractors, the cancellation of most current open positions, additional mandatory shut-down days, a reduction in leased office space, a lower company contribution to the 401(k) plan, and decreases in discretionary spending. As a result of the actions announced today, Cognex expects to record a pre-tax charge of approximately $4 million in the second quarter of 2009.
“In late 2008, it became clear to us that the slumping global economy would negatively impact our business. Based on that, we reduced our expenses in anticipation of lower revenue in 2009,” said Dr. Robert J. Shillman, the Chairman and Chief Executive Officer of Cognex. “Unfortunately, conditions have deteriorated beyond what we had anticipated last fall, and because we currently see no sign of improvement in the near term, we are taking the additional steps announced today to more closely align our costs with the decreased level of demand for our products.”
Dr. Shillman continued, “Although the anticipated savings from these cost-cutting measures are substantial, unless the business climate improves significantly, they are unlikely to be sufficient to guarantee our profitabilty for 2009. Although profitability is very important to us, the deeper cuts that would have been required to achieve it would have required delaying or even eliminating programs that we believe are crucial to the long-term success of our company. Thankfully, because of our past profitable history and our conservative financial management, we have built a strong balance sheet with a large cash reserve that we have been saving for a rainy day....and, unfortunately, that day has come."
Certain statements made in this press 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,” and similar words. These forward-looking statements, which include statements regarding business and market trends, the company’s curtailment of spending, and the company’s financial outlook, 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; (2) the cyclicality of the semiconductor and electronics industries; (3) the inability to achieve significant international revenue; (4) fluctuations in foreign currency exchange rates; (5) the loss of a large customer; (6) the reliance upon key suppliers to manufacture and deliver critical components for Cognex products; (7) the inability to attract and retain skilled employees; (8) the inability to design and manufacture high-quality products; (9) the technological obsolescence of current products and the inability to develop new products; (10) the failure to effectively manage product transitions or accurately forecast customer demand; (11) the failure to properly manage the distribution of products and services; (12) the inability to protect Cognex proprietary technology and intellectual property; (13) the company’s involvement in time-consuming and costly litigation; (14) the impact of competitive pressures; (15) the challenges in integrating and achieving expected results from acquired businesses; (16) potential impairment charges with respect to our investments or for acquired intangible assets or goodwill; (17) exposure to additional tax liabilities; and (18) the other risks detailed in the company’s reports filed with the SEC, including the company’s Form 10-K for the fiscal year 2008. 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.
Director of Investor Relations
Senior Manager, Corporate Communications