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Cognex and Honeywell Enter Into Global Alliance
Cognex Corporation Posted 10/06/2000
Natick, MA, October 4, 2000-Cognex Corporation (NASDAQ: CGNX), the world's leading supplier of machine vision systems, announced today that on September 30, 2000 it purchased, for an undisclosed amount of cash, the web inspection technology of Honeywell, a global service and manufacturing corporation. The transaction is structured as an asset purchase and will be accounted for under the purchase method of accounting.
Under the terms of the agreement, Cognex acquired critical technology of Honeywell's web inspection business, and will hire certain key sales and engineering employees who have been directly affiliated with Honeywell's web inspection business. The employees and the purchased technology will be integrated into Cognex's Surface Inspection Systems Division (SISD). As part of the agreement, Cognex and Honeywell have also formed an exclusive alliance in which Cognex will provide web inspection systems to Honeywell's customers in the pulp and paper industry around the world.
"This is a very important transaction for Cognex, and one that we have been anticipating for a number of years," said Dr. Robert J. Shillman, Cognex's President, CEO, and Chairman. "This purchase will enable us to rapidly expand our penetration into the pulp and paper industry, which is the largest segment of the web inspection market. And, Honeywell's customers will be able to purchase leading-edge, proven technologies in web inspection from Cognex, knowing these systems can be integrated with Honeywell's comprehensive automation portfolio for pulp and paper. We look forward to quickly adding Honeywell's clients to the growing list of customers who have expressed a high degree of satisfaction with our newest Smartview ICN product line."
"Honeywell and Cognex will work closely together to deliver integrated solutions to Honeywell's customers in the pulp and paper industry around the world," said John Weber, President of Honeywell Industrial Control.
Dr. Shillman added, "In addition to the increased business that we anticipate this transaction to bring to our Surface Inspection Systems Division (SISD), Cognex has also simultaneously entered into a preferred-customer relationship with Honeywell for our modular vision systems. Through this relationship, we expect that Honeywell will purchase approximately $2 million of Cognex vision systems over the next four years to be used in Honeywell's own factories to control the manufacture and quality of a wide variety of discrete items, ranging from thermostats to switches."
Cognex does not expect the acquisition to have any material impact on financial results for the third quarter of 2000. Cognex anticipates that the relationship with Honeywell for its surface inspection products will yield incremental revenues beginning in fiscal year 2001. The company expects revenue to increase by approximately $6 million in 2001 and, excluding the amortization of intangible assets acquired by Cognex, that earnings per share will increase by approximately $0.01 per share. Reported results in 2001, which will include the amortization of intangible assets, are expected to be lower by approximately $0.02 per share.
A web inspection system is a special purpose machine vision system designed to detect and classify surface defects on a continuous, moving sheet of material (such as paper, plastic, or metal) called a web. Manufacturers of such materials use the vision system for controlling the manufacturing process of the materials in order to improve quality, decrease waste, and reduce equipment down time on the manufacturing line. Prior to this partnership with Honeywell, Cognex's Surface Inspection Systems Division was already the world's leading provider of web inspection systems to manufacturers of plastics and metals around the world, and with this partnership, Cognex will become the largest supplier of web inspection systems to paper manufacturers as well.
Honeywell Industrial Control, headquartered in Phoenix, Arizona, is a $3 billion division of Honeywell. Honeywell is a $24 billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; power generation systems; specialty chemicals; fibers; plastics; and electronic and advanced materials. Honeywell Industrial Control consists of two divisions: Honeywell Industrial Automation and Control (IAC) which is the leading worldwide supplier of industrial automation solutions for industries such as refining, petrochemicals, chemicals, oil and gas, pulp and paper, pharmaceuticals and power generation; and Honeywell Sensing and Control which is a global supplier of sensors, switches and control products that are used in the automotive, information technology, consumer, aviation and industrial markets.
Cognex Corporation designs, develops, manufactures, and markets machine vision systems, or computers that can "see." Cognex is the world's leader in the machine vision industry, having shipped more than 100,000 machine vision systems, representing over $1 billion in cumulative revenue, since the company's founding in 1981. Cognex's Modular Vision Systems Division, headquartered in Natick, Massachusetts, specializes in machine vision systems which are used for automating the manufacture of a wide range of discrete items and for assuring their quality. Cognex's Surface Inspection Systems Division, headquartered in Alameda, California, specializes in machine vision systems, also known as web inspection systems, which are used for inspecting the surfaces of products manufactured in a continuous fashion, such as metals, paper, and plastics. In addition to its corporate headquarters in Natick, Massachusetts, Cognex also has regional offices located throughout North America, Japan, Europe, and Southeast Asia. Visit Cognex on-line at http://www.cognex.com
Certain statements made in this press release are forward-looking statements. These statements are based on the company's current expectations and estimates as to prospective events and circumstances which may or may not be in the company's control and as to which there can be no firm assurances given. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. The company wishes to caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The company disclaims any obligation subsequently to revise forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Further discussions of risk factors are also available in the company's registration statements filed with the Securities and Exchange Commission.
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