Item 7.01 Regulation FD Disclosure
Products of Cognex Corporation ("Cognex") are manufactured utilizing third-party
contractors, whereby the majority of component procurement, system assembly, and
initial testing are performed by electronics manufacturing services suppliers.
On June 7, 2022, Cognex's primary contract manufacturer experienced a fire at
its plant in Indonesia. At this time, Cognex is not aware of any casualties or
injuries associated with the fire. A significant portion of Cognex's products is
presently manufactured by this contract manufacturer and Cognex finished goods,
unfinished goods, component inventory, and equipment used to manufacture
Cognex's products are located at this site. A portion of Cognex's finished
goods, unfinished goods and component inventory are stored in the building most
affected by the fire and are estimated to be valued at approximately $35
million. In addition, there is approximately $35 million of Cognex-designated
components owned by the contract manufacturer located at this site. Cognex is
working with this contract manufacturer to assess the damage. Cognex is also
working with this contract manufacturer to determine when production may be
resumed at this plant or potentially shifted to other plants of this contract
manufacturer or other suppliers, as well as developing a plan for sourcing
components that may be necessary for production following this incident.
As of the date of this report, it is too early to determine the potential impact
of this incident on Cognex's results of operations and financial condition for
the remainder of the fiscal year or the scope of insurance coverage related to
this incident. However, Cognex does not currently believe that this incident
will have a material impact on Cognex's results of operations and financial
condition for the second quarter of 2022. Cognex expects to provide more
information on this matter during its second quarter earnings conference call.
Safe Harbor for Forward-Looking Statements
Certain statements made in this report constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Readers can
identify these forward-looking statements by our 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 statements are based on current estimates and expectations
as to prospective events and circumstances, which may or may not be in Cognex's
control and as to which there can be no firm assurances given. These
forward-looking statements, which include statements regarding the potential
impact of the fire at Cognex's primary contract manufacturer's plant in
Indonesia on Cognex's future results of operations and financial condition, the
scope of insurance coverage, and the ability to resume full production, shift
production to other plants and/or source necessary components, involve known and
unknown risks and uncertainties that could cause actual results to differ
materially from those projected. Such risks and uncertainties include, but are
not limited to: (1) the reliance on key suppliers to manufacture and deliver
Cognex products; (2) the inability to obtain components for Cognex products or
increased costs or delays in obtaining such components; (3) the failure to
resume full production in a timely manner; (4) delays in the delivery of Cognex
products and related revenue recognition; (5) challenges in shifting production
to other plants, including as a result of the production and test equipment
unique to the manufacture of Cognex products; (6) increased costs of production
of Cognex products; (7) the inability to manage disruptions to Cognex's business
and distribution centers; (8) the inability to manufacture high-quality
products; (9) the failure to meet delivery schedules resulting in customer
dissatisfaction; (10) the timing and scope of insurance coverage; (11) the
impact of competitive pressures; (12) unfavorable global economic conditions;
and (13) economic, political, and other risks associated with international
operations. The foregoing list should not be construed as exhaustive and readers
should refer to the detailed discussion of risk factors included in Cognex's
Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and other
reports filed with the Securities and Exchange Commission. Cognex cautions
readers not to place undue reliance upon any such forward-looking statements,
which speak only as of the date made. Cognex 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.
Exhibit No. Description
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded
within the Inline XBRL document)
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