COGNEX CORP 10-K

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is traded on The NASDAQ Stock Market LLC, under the symbol CGNX. As of January 31, 2021, there were approximately 650 shareholders of record of the Company’s common stock. The Company believes the number of beneficial owners of the Company’s common stock on that date was substantially greater. In October 2018, the Company's Board of Directors authorized the repurchase of $200,000,000 of the Company's common stock. As of December 31, 2020, the Company repurchased 2,816,000 shares at a cost of $121,348,000 under this program, including 1,215,000 shares at a cost of $51,036,000 during 2020, leaving a remaining balance of $78,652,000. On March 12, 2020, the Company's Board of Directors authorized the repurchase of an additional $200,000,000 of the Company's common stock. Purchases under this March 2020 program will commence upon completion of the October 2018 program. The Company may repurchase shares under this program in future periods depending on a variety of factors, including, among other things, the impact of dilution from employee stock awards, stock price, share availability, and cash requirements. The Company is authorized to make repurchases of its common stock through open market purchases, pursuant to Rule 10b5-1 trading plans, or in privately negotiated transactions. The following table sets forth information with respect to purchases by the Company of shares of its common stock during each fiscal month of the fourth quarter of 2020: Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs September 28 - October 25, 2020 — $ — — $ 278,652,000 October 26 - November 22, 2020 — — — 278,652,000 November 23 - December 31, 2020 — — — 278,652,000 Total — $ — — $ 278,652,000 The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report. The Company’s Board of Directors declared and paid cash dividends of $0.050 per share in the first, second, and third quarters of 2019, and $0.055 in the fourth quarter of 2019, as well as in the first, second, and third quarters of 2020. The dividend was increased to $0.060 per share in the fourth quarter of 2020. Also, in the fourth quarter of 2020, an additional special cash dividend of $2.00 per share was declared and paid. Total dividends amounted to $390,508,000 in 2020, which included $351,428,000 paid for the special cash dividend, $35,124,000 in 2019, and $31,865,000 in 2018. Future dividends will be declared at the discretion of the Company's Board of Directors and will depend upon such factors as the Board deems relevant, including, among other things, the Company's ability to generate positive cash flow from operations. 16 Table of Content Set forth below is a line graph comparing the annual percentage change in the cumulative total shareholder return on the Company’s common stock, based on the market price of the Company’s common stock, with the total return on companies within the Nasdaq Composite Index and the Research Data Group, Inc. Nasdaq Lab Apparatus & Analytical, Optical, Measuring & Controlling Instrument (SIC 3820-3829 US Companies) Index (the “Nasdaq Lab Apparatus Index”). The performance graph assumes an investment of $100 in each of the Company and the two indices, and the reinvestment of any dividends. The historical information set forth below is not necessarily indicative of future performance. Data for the Nasdaq Composite Index and the Nasdaq Lab Apparatus Index was provided to the Company by Research Data Group, Inc. *$100 invested on 12/31/2015 in stock or index, including reinvestment of dividends. Fiscal year ended December 31. 12/15 12/16 12/17 12/18 12/19 12/20 Cognex Corporation 100.00 189.58 365.72 232.13 337.84 498.56 NASDAQ Composite 100.00 108.87 141.13 137.12 187.44 271.64 NASDAQ Stocks 100.00 103.62 158.96 149.08 207.48 280.67 (SIC 3820-3829 U.S. Companies) Lab Apparatus & Analyt,Opt, Measuring, and Controlling Instrument 17 Table of Content ITEM 6: SELECTED FINANCIAL DATA Year Ended December 31, 2020 2019 2018 2017 2016 (In thousands, except per share amounts) Statement of Operations Data: Revenue $ 811,020 $ 725,625 $ 806,338 $ 766,083 $ 529,515 Cost of revenue (1) 206,421 189,754 206,052 187,289 131,070 Gross margin 604,599 535,871 600,286 578,794 398,445 Research, development, and engineering expenses (1) 130,982 119,427 116,445 99,205 78,269 Selling, general, and administrative expenses (1) 267,593 273,842 262,699 220,728 166,110 Restructuring charges 15,924 — — — — Intangible asset impairment charges 19,571 — — — — Operating income 170,529 142,602 221,142 258,861 154,066 Non-operating income 16,382 20,392 13,432 7,603 8,011 Income from continuing operations before income tax expense (benefit) 186,911 162,994 234,574 266,464 162,077 Income tax expense (benefit) on continuing operations 10,725 (40,871) 15,307 89,752 18,128 Net income from continuing operations 176,186 203,865 219,267 176,712 143,949 Net loss from discontinued operations (1) — — — — (255) Net income $ 176,186 $ 203,865 $ 219,267 $ 176,712 $ 143,694 Basic earnings per weighted-average common and common-equivalent share (2): Net income from continuing operations $ 1.02 $ 1.19 $ 1.27 $ 1.02 $ 0.84 Net loss from discontinued operations $ — $ — $ — $ — $ — Net income $ 1.02 $ 1.19 $ 1.27 $ 1.02 $ 0.84 Diluted earnings per weighted-average common and common-equivalent share (2): Net income from continuing operations $ 1.00 $ 1.16 $ 1.24 $ 0.98 $ 0.83 Net loss from discontinued operations $ — $ — $ — $ — $ — Net income $ 1.00 $ 1.16 $ 1.24 $ 0.98 $ 0.83 Weighted-average common and common-equivalent shares outstanding (2): Basic 173,489 171,194 172,333 173,287 170,676 Diluted 176,592 175,269 177,406 179,551 174,144 Cash dividends per common share (2) $ 2.2250 $ 0.2050 $ 0.1850 $ 0.1675 $ 0.1475 (1) Amounts include stock-based compensation expense, as follows: Cost of revenue $ 1,365 $ 1,504 $ 2,447 $ 1,881 $ 1,052 Research, development, and engineering 13,387 15,748 14,578 11,022 6,271 Selling, general, and administrative 27,909 28,337 24,065 19,039 13,235 Discontinued operations — — — — — Total stock-based compensation expense $ 42,661 $ 45,589 $ 41,090 $ 31,942 $ 20,558 (2) Prior period results have been adjusted to reflect the two-for-one stock split effected in the form of a stock dividend which occurred in 2017. December 31, 2020 2019 2018 2017 2016 (In thousands) Balance Sheet Data: Working capital $ 469,394 $ 486,754 $ 688,969 $ 517,356 $ 461,357 Total assets 1,800,702 1,885,935 1,289,667 1,287,753 1,038,361 Shareholders’ equity 1,262,202 1,355,710 1,135,263 1,095,673 963,385 18 Table of Content