Edited Transcript of CGNX earnings conference call or presentation 27-Apr-20 9:00pm GMT

After a challenging year at 2019, we were looking send to improved macroeconomic conditions at 2020, besides entire of that has changed at modern weeks. And alike many other companies, we are now preparing during difficult days and possibly months ahead due to the restrictions that governments almost the dirt consume placed above voyage and above their businesses and above their citizens. at a time alike this, our robust remains sheet, with $845 million at money and investments and having no debt, provides us with the breathing room and flexibility that many other companies just conduct no have. And during of that, we will exist able to last our long-term manufacture development efforts, which to enable us to appear from this emergency at level a stronger competitive situation than we held at the past.

Right now, we are entire participating remotely above this call. during farther details above the first piece and during a high-level advice of our plans at the modern challenging environment, I'll grow the exclaim at to my partner, our CEO, plunder Willett. Rob, the microphone is yours.

--------------------------------------------------------------------------------

Robert J. Willett, Cognex company - CEO, headmaster & Executive Director [4]

--------------------------------------------------------------------------------

Thank you, Dr. Bob, and good evening, everyone. Our results during the first piece of 2020 were at row with our expectations. revenue and entire border were delivered at the high goal of our expected ranges. Operating expenses and the impose assess were lower than anticipated. The team did a good career managing the provide tie despite some component shortages from Chinese suppliers that had postponed delivery dates. We now exclaim on many of those manufacturers successfully ramping up manufacture during China goes backward to work. We either were able to successfully adjust an unusually high number of requests to during strong quicken or, at some cases, extend bid deliveries at March.

In modern weeks, conditions consume grow more challenging at most regions of the world, most notably at Europe and the Americas. Many customers are locked down or operating with reduced capacity, and that's impacting our faculty to hire with them and obtain new orders. especially difficult strike is the automotive industry, which was our largest goal just final year. There's a long-term latent during growth during the just transitions from interior combustion engines to electric vehicles, besides the near-term expectation has deteriorated significantly. Many customers consume suspended manufacture and are no allowing our sales engineers into mechanism to assist with previously planned automation projects that are now above hold.

In consumer electronics, we consume perpendicular that it's either early to foretell the timing and magnitude of this year's investment cycle, which we typically consume insight into by now. Our largest customers are asking during -- at fact, counting above us to exist ready with manufacture shipments and on-site help during their advanced automation initiatives. However, we admit that there were risks almost both the timing and the size of those automation projects given the modern situation. The best goal just during us right now is clearly logistics, which was our third largest just at 2019. Online e-commerce sales are accelerating during a arise of COVID-related restrictions. during the recognized head at mechanism vision and barcode reading during e-commerce, Cognex is well-positioned to capitalize above this trend. E-commerce companies and retailers with e-commerce presence are continuing to instrument Cognex vision and ID products to enlarge both productivity and capacity. Our technique has grow level more valuable at this emergency during our (inaudible) and are improve able to preserve social distancing at their distribution centers. at the immediate advice -- I'm sorry, at the immediate future, our priorities are supporting our customers at a time alike this and helping Cognoids exist healthy, safe and productive.

Cognex is mainly a software company. We consume the processes and systems at lay during Cognoids to career pretty effectively from their homes. Most Cognoids are now doing that, working difficult to preserve manufacture development schedules, making video sales calls and manufacture demonstrations and remotely supporting our customers' critical (inaudible). We consume taken measures to preserve a safe surroundings during those employees who are on-site at Cognex mechanism supporting indispensable material functions. We are working with many customers at critical industries, including logistics, life sciences and medical-related businesses that consume formally asked us to last supplying them along the modern crisis. during of our move-fast culture, we're able to quickly holiday up with changes to our operations that allowed us to face their needs.

In condition of our provide chain, sourcing component parts and accessories during our products is a challenge. besides thankfully, it's no a widespread question during us today. We are managing strong under the circumstances, and we last to career closely with our suppliers to mitigate risks to our delivery schedules. at addition, our robust remains sheet, together with our conservative manufacturing philosophy, consume enabled us to perpendicular a buffer of critical component inventory during epoch alike these. level so, we admit the possibility of farther closures and disruption down the road. Adding more supicion is the governments that consume implemented and last to instrument restrictions above the motion of nation and goods. These are really equal challenging epoch during our material that has suppliers and customers almost the world.

Regarding our new products, early this month, we held a number of large-scale, be virtual meetings during our sales engineers and distributor partners. They received an in-depth emerge at our new products, including our [Ground Mod] camera featuring deep knowledge software, ID-recognized EasyBuilder interface, this manufacture launch brings deep knowledge technique allows customers to solve sophisticated visual and inspection tasks with relative ease.

Also presented was the Cognex DataMan 475V. The V is during verifier. DataMan 475V is an in-line system that measures the accuracy and characteristic of a barcode based above globally recognized standards. Importantly, this is performed at row above high-speed manufacture lines during the barcodes are being printed and used at industries, including automotive, life sciences, consumer products and logistics.

Let's lesson almost Cognoids, our people. at a time alike this, I feel equal grateful to exist chief such a committed, talented and creative masses of people. Throughout this crisis, they consume exemplified our robust culture, working difficult and moving swift at this volatile environment. Our work-hard, play-hard, move-fast civilization is a significant entertain above entire display to entire our stakeholders, our customers, our employees, our vendors, last, besides no least, our shareholders. That entertain is during the year ahead and ponder almost (inaudible) customers and reallocate our efforts to promising growth.

Before we affect above to the details from our first quarter, I'd alike to extend a warm salute to our new CFO, Paul Todgham, who joined Cognex at early March. to state that Cognex joined at an interesting time used to exist something of an understatement. Paul brings extensive experience chief econmic teams and at strategic and operational planning after working at large-scale businesses at the past 20 years. We are equal pleased to consume him with us.

Paul, at to you.

--------------------------------------------------------------------------------

Paul Todgham, Cognex company - Senior VP of Finance & CFO [5]

--------------------------------------------------------------------------------

Thank you, Rob, and hello, everyone. My first 2 months above the career consume really been a only adventure, besides I'm equal excited to exist divide of Cognex and to assist motivate our future. I'm especially impressed with the nation I've met, robust career ethic and Cognex' move-fast culture. I emerge send to conference many of you at the investment community at the coming months. And I expect entire of you above this exclaim and your loved ones are safe and healthy.

Let's grow now to our econmic results during Q1 of 2020. revenue was $167 million, which is at the peak goal of our February guidance. during expected, revenue declined year-on-year and sequentially due to continued softness at automotive and the broad mill automation market. Compared to guidance, the refuse at the manufacturing sector was partially offset by customers accelerating orders at March to buffer possible provide risks that they feared. despite the lower revenue, entire border of 75% represents an enlarge at both Q1 of 2019 and Q4 '19 during a arise of a touch at revenue mingle to higher-margin products.

Operating expenses increased by 8% year-on-year and were down slightly above a sequential basis. at the past year, we added employees and other recurring costs related to the Sualab acquisition, and we made investments to help our strategic priorities. These expenses were partially offset by lower voyage and other discretionary expenses at the quarter.

Operating border was 13%, down from 17% at Q1 of 2019. above a sequential basis, operating border increased by 3 percent points during a arise of the higher entire border and lower operating expenses compared with Q4.

The effective impose assess at Q1 was 17% ago (inaudible) our expected impose of 19% due to a touch at allowance to lower impose jurisdictions. Excluding discrete impose items, salary per portion were $0.11 at Q1 compared with $0.17 at Q1 of 2019 and $0.11 at Q4.

Looking at the change at revenue during Q1 year-on-year from a geographic perspective, Asia performed the best of any district during a arise of higher revenue from consumer electronics. China increased at the mid-teens at a relatively frail piece a year ago, despite material shutdowns, and the relief of Asia grew by almost 20% at Q1 year-on-year.

Revenue from the Americas declined by high single-digits year-on-year. This was mainly a arise of the timing of revenue from logistics. The logistics sector, during plunder noted, continues to conduct strong during us. We're home a substantial bid backlog to exist delivered at the coming months when access to distribution centers is less restricted.

In Europe, revenue declined at the high teens year-on-year, due mainly to softness at automotive. Unfortunately, we don't exclaim on many ingenious spots at Europe at the moment.

Turning to our remains sheet, during noted by Dr. Bob, we ended the piece with $845 million at money and investments and no debt. Cognex has a history of compatible money generation during strong during a financially disciplined Board of Directors and management team. Uses of money are mainly to help our long-term growth objectives. We either portion our many years of success with shareholders along stock buybacks and dividends. at that regard, we repurchased 1.2 million shares of Cognex stock, totaling $51 million at Q1 and added a new $200 million authorization to our repurchase program. We are favourable to consume the faculty to last the buyback program and however consume money during acquisitions, if opportunities arise. We either paid almost $10 million at dividends to shareholders.

Now I'll grow the exclaim backward at to Rob.

--------------------------------------------------------------------------------

Robert J. Willett, Cognex company - CEO, headmaster & Executive Director [6]

--------------------------------------------------------------------------------

Thank you, Paul. Those of you who pursue Cognex know that we typically furnish guidance one piece out. However, given the modern material shutdowns, widespread voyage restrictions and latent disruptions we can observe at our provide chain, there's either much supicion today during us to exist overly specific. Our customers and vendors consume shared some of their plans with us, besides they are either facing uncertainties. I can say, however, that we confide both revenue and salary per share, excluding discrete impose items, will refuse at Q2 above both a year-on-year and sequential basis.

Although we consume performed reasonably strong overall at April, implore at the overall mill automation just is deteriorating, especially at Europe and the Americas. entire border during Q2 is expected to remain at the mid (inaudible) range, though lower than the entire border reported during Q1.

As during expenses, our leadership team has experience with tomb economic downturns, and we are working together to aggressively govern costs. We wish to decrease operating expenses at Q2 by greater than 10% above a sequential basis. Savings involve lower voyage and discretionary expenses and a more restricted hiring plan. Lastly, the effective impose assess is expected to exist 17%, excluding discrete impose items.

Now we will empty the exclaim during questions. Operator, please, progress ahead.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Our first riddle is from Jim Ricchiuti from Needham & Company.

--------------------------------------------------------------------------------

James Andrew Ricchiuti, Needham & Company, LLC, inquiry portion - Senior Analyst [2]

--------------------------------------------------------------------------------

I wanted to just, if I could, progress backward to the comment you made about, Rob, that I ponder you made almost an often high number of requests to both quicken or delay. Was the net consequence of that more above the sure side? And was that tied more to the comment you made almost consumer electronics at Asia?

--------------------------------------------------------------------------------

Robert J. Willett, Cognex company - CEO, headmaster & Executive Director [3]

--------------------------------------------------------------------------------

Yes, Jim, thanks during your question. accordingly what really, what I was referring to was right almost the goal of the quarter, we saw pretty a little customers saying, asking to consume their delivery dates moved at earlier. And we saw others state they wanted them pushed out. I used to say, net, it was possibly an increase, possibly with a little million dollars, besides it was both ways, and it wasn't really industry specific, I used to say.

--------------------------------------------------------------------------------

James Andrew Ricchiuti, Needham & Company, LLC, inquiry portion - Senior Analyst [4]

--------------------------------------------------------------------------------

Got it. That's helpful. And it sounds alike you're however exclaim on at exhibition -- or at least the activity even above the logistics aspect is however encouraging. And I'm wondering, if I emerge at your traditional brick-and-mortar retailers, which, I guess, has been a fast-growing divide of the business, how is this material holding up? I intend how used to you characterize this? Is it holding up during you're aligned with some of the key players who appearance to exist doing improve at this market, presumably?

--------------------------------------------------------------------------------

Robert J. Willett, Cognex company - CEO, headmaster & Executive Director [5]

--------------------------------------------------------------------------------

Yes, Jim, I used to state -- I used to portion it alike this. The customers who are -- consume grow proficient at e-commerce, if they started there or they're moving coherently and aggressively into e-commerce, I'd state they're doing well. They exclaim on a destiny of material and they moved their systems online, right? Those who haven't, I ponder we're seeing their businesses deteriorate. accordingly I ponder e-commerce players, I think, are equal strong positioned to last during a arise of what's going on. And Cognex, I think, will last with them.

And I used to state that's the divide of logistics, obviously, where we're strongest and consume the largest share. besides then there are naturally those customers, more traditional e-commerce bricks-and-mortar players, who haven't automated their interactions with customers and taken them online. And then other companies, we ponder divide of our logistics business, possibly global mail offices, airport baggage kind businesses that I ponder are looking very, equal frail at this time. accordingly we used to wish to exclaim on our material with them drop off.

--------------------------------------------------------------------------------

James Andrew Ricchiuti, Needham & Company, LLC, inquiry portion - Senior Analyst [6]

--------------------------------------------------------------------------------

But the summer ramp from one customer, is that however on-track? And I'll relief there, hire somebody else ask.

--------------------------------------------------------------------------------

Robert J. Willett, Cognex company - CEO, headmaster & Executive Director [7]

--------------------------------------------------------------------------------

Yes, Jim. Certainly, I ponder the timing of it was -- the timing of some of the bigger logistics orders we consume will depend above their faculty to implement. A destiny of these companies are operating at higher rates than they've ever operated at, at their highest mountain moments at foregoing years. accordingly the concept that we can progress in, relief the row and conduct automation implementation at this time is obviously no happening. though orders are coming in, I think, at a good clip at that market. accordingly our faculty to illustrate that, during revenue, I think, naturally is a second half miracle during us at this point. And the timing will depend above a number of factors, one of which naturally is our faculty to obtain access to their mechanism and their engineers to instrument these improvements.

--------------------------------------------------------------------------------

Operator [8]

--------------------------------------------------------------------------------

Our next riddle is from Joe Ritchie from Goldman Sachs.

--------------------------------------------------------------------------------

Joseph Alfred Ritchie, Goldman Sachs masses Inc., inquiry portion - VP & direct Multi-Industry Analyst [9]

--------------------------------------------------------------------------------

I expect you're entire well. just -- possibly just touching above the China comments, I saw at the Q, China was up 15% this quarter. I'm just curious, like, you guys strike the high goal of your revenue mountain during the quarter. It seems alike it was quite orderly, at least at Asia-Pac. during we're coming out of -- and things are starting to normalize at China, possibly lesson a tiny division almost alike what the bid patterns emerge alike during the piece progressed? And if you could furnish some more commentary almost what really drove the might at China this past quarter, that used to exist helpful.

--------------------------------------------------------------------------------

Robert J. Willett, Cognex company - CEO, headmaster & Executive Director [10]

--------------------------------------------------------------------------------

Previous : মোল্লা মাসুদ ||আলী হায়দার || সাকুরা ওটি ভিডিও এ্যালবাম|| সেরা ০৬ টি ভিডিও