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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q

(Mark One)

[X]    Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended September 28, 2003 or


[  ]    Transition Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from
 to

Commission File Number 0-17869

COGNEX CORPORATION

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Massachusetts                                                  |  | 04-2713778                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer Identification No.)

One Vision Drive
Natick, Massachusetts 01760-2059
(508) 650-3000




(Address, including zip code, and telephone number, including area code,
of principal executive offices)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

|         |  |  |  |         
|-------- |  |  |  | --------
|Yes  [X] |  |  |  | No  [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act)

|         |  |  |  |         
|-------- |  |  |  | --------
|Yes  [X] |  |  |  | No  [  ]

As of October 26, 2003, there were 43,791,169 shares of Common Stock,
$.002 par value, of the registrant outstanding.



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TABLE OF CONTENTS



|                                          |                                                                                               |                                                 |  |  |  |  |  | 
|----------------------------------------- | --------------------------------------------------------------------------------------------- | ----------------------------------------------- |  |  |  |  |  | 
|PART I: FINANCIAL INFORMATION            
|                                          | ITEM 1: FINANCIAL STATEMENTS                                                                 
|                                          |                                                                                               | CONSOLIDATED STATEMENTS OF OPERATIONS          
|                                          |                                                                                               | CONSOLIDATED BALANCE SHEETS                    
|                                          |                                                                                               | CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY 
|                                          |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
|                                          |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS     
|                                          | ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                          | ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                                          | ITEM 4: CONTROLS AND PROCEDURES                                                              
|PART II: OTHER INFORMATION               
|                                          | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                                          | ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                                            
|                                          | ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                      
|                                          | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                                          | ITEM 5. OTHER INFORMATION                                                                    
|                                          | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                               
|EX-31.1 SECT. 302 CERTIFICATION OF C.E.O.
|EX-31.2 SECT. 302 CERTIFICATION OF C.F.O.
|EX-32.1 SECT. 906 CERTIFICATION OF C.E.O.
|EX-32.2 SECT. 906 CERTIFICATION OF C.F.O.



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INDEX

|        |  |                                                                                                                                  |  | 
|------- |  | -------------------------------------------------------------------------------------------------------------------------------- |  | 
|PART I  |  | FINANCIAL INFORMATION                                                                                                           
|Item 1. |  | Financial Statements                                                                                                            
|        |  | Consolidated
Statements of Operations for the three-month and nine-month periods
ended September 28, 2003 and September 29, 2002 | 
|        |  | Consolidated
Balance Sheets at September 28, 2003 and December 31,
2002                                                          | 
|        |  | Consolidated
Statement of Stockholders Equity for the nine-month period ended
September 28, 2003                               
|        |  | Consolidated
Condensed Statements of Cash Flows for the nine-month periods ended
September 28, 2003 and September 29, 2002       | 
|        |  | Notes
to Consolidated Financial Statements                                                                                      
|Item 2. |  | Managements
Discussion and Analysis of Financial Condition and Results of
Operations                                           
|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                                                      
|Item 4. |  | Controls and Procedures                                                                                                         
|PART II |  | OTHER INFORMATION                                                                                                               
|Item 1. |  | Legal Proceedings                                                                                                               
|Item 2. |  | Changes in Securities and Use of Proceeds                                                                                       
|Item 3. |  | Defaults Upon Senior Securities                                                                                                 
|Item 4. |  | Submission of Matters to a Vote of Security Holders                                                                             
|Item 5. |  | Other Information                                                                                                               
|Item 6. |  | Exhibits and Reports on Form 8-K                                                                                                
|        |  | Signatures                                                                                                                      





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PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)

|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |        |  
|----------------------------------------------------------------- | ------- | ------- | ------ | ------------------ | ------ | ----------------- | ------ | ------------- | ------ | ------------- | ------- | ------ | ------ | - | ------- | ------ | ------ | -
|                                                                  |         |         |        | Three Months Ended |        | Nine Months Ended
|                                                                  |         |         |        | September 28,      |        | September 29,     |        | September 28, |        | September 29,
|                                                                  |         |         |        | 2003               |        | 2002              |        | 2003          |        | 2002         
|                                                                  |         |         |        |                    |        |                   |        |               |        |              
|                                                                  |         |         |        | (unaudited)        |        | (unaudited)      
|Revenue                                                           |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |       
|                                                                  | Product |         | $      | 33,965             |        |                   | $      | 27,268        |        |               | $       | 93,604 |        |   | $       | 66,930 |       
|                                                                  | Service |         |        | 4,739              |        |                   |        | 4,559         |        |               |         | 14,610 |        |   |         | 13,348 |       
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|                                                                  |         |         | 38,704 |                    |        |                   | 31,827 |               |        |               | 108,214 |        |        |   | 80,278  |       
|Cost of revenue                                                   |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |       
|                                                                  | Product |         |        | 10,139             |        |                   |        | 8,219         |        |               |         | 28,004 |        |   |         | 20,330 |       
|                                                                  | Service |         |        | 3,051              |        |                   |        | 2,846         |        |               |         | 8,901  |        |   |         | 8,528  |       
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|                                                                  |         |         | 13,190 |                    |        |                   | 11,065 |               |        |               | 36,905  |        |        |   | 28,858  |       
|Gross margin                                                      |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |       
|                                                                  | Product |         |        | 23,826             |        |                   |        | 19,049        |        |               |         | 65,600 |        |   |         | 46,600 |       
|                                                                  | Service |         |        | 1,688              |        |                   |        | 1,713         |        |               |         | 5,709  |        |   |         | 4,820  |       
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|                                                                  |         |         | 25,514 |                    |        |                   | 20,762 |               |        |               | 71,309  |        |        |   | 51,420  |       
|Research, development, and engineering expenses                   |         |         | 6,246  |                    |        |                   | 6,714  |               |        |               | 18,492  |        |        |   | 19,564  |       
|Selling, general, and administrative expenses                     |         |         | 13,761 |                    |        |                   | 15,551 |               |        |               | 40,954  |        |        |   | 42,973  |       
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|Operating income (loss)                                           |         |         | 5,507  |                    |        |                   | (1,503 | )             |        |               | 11,863  |        |        |   | (11,117 | )     
|Foreign currency gain (loss)                                      |         |         | 828    |                    |        |                   | 109    |               |        |               | (963    | )      |        |   | 273     |       
|Investment and other income                                       |         |         | 1,145  |                    |        |                   | 2,626  |               |        |               | 4,054   |        |        |   | 1,224   |       
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|Income (loss) before provision (benefit) for income taxes         |         |         | 7,480  |                    |        |                   | 1,232  |               |        |               | 14,954  |        |        |   | (9,620  | )     
|Income tax provision (benefit)                                    |         |         | 2,342  |                    |        |                   | 451    |               |        |               | 4,717   |        |        |   | (3,169  | )     
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|Net income (loss)                                                 |         | $       | 5,138  |                    |        | $                 | 781    |               |        | $             | 10,237  |        |        | $ | (6,451  | )     
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|Net income (loss) per common and
common-equivalent share:         |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |       
|                                                                  |         | Basic   |        | $                  | .12    |                   |        | $             | .02    |               |         | $      | .24    |   |         | $      | (.15   | )
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|                                                                  |         | Diluted |        | $                  | .11    |                   |        | $             | .02    |               |         | $      | .23    |   |         | $      | (.15   | )
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|Weighted-average common and common-equivalent shares
outstanding: |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |       
|                                                                  |         | Basic   |        |                    | 43,153 |                   |        |               | 43,309 |               |         |        | 42,947 |   |         |        | 43,817 |  
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|                                                                  |         | Diluted |        |                    | 44,890 |                   |        |               | 43,751 |               |         |        | 44,120 |   |         |        | 43,817 |  
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       
|Cash dividends per common share                                   |         | $       | .06    |                    |        | $                 |       |               |        | $             | .06     |        |        | $ |        |       
|                                                                  |         |         |        |                    |        |                   |        |               |        |               |         |        |        |   |         |        |       

The accompanying notes are an integral part of these consolidated financial
statements.

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COGNEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)

|                                     |                                                                                                                             |                            |         |               |         |              |         |         |         | 
|------------------------------------ | --------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ------------- | ------- | ------------ | ------- | ------- | ------- | 
|                                     |                                                                                                                             |                            |         | September 28, |         | December 31,
|                                     |                                                                                                                             |                            |         | 2003          |         | 2002        
|                                     |                                                                                                                             |                            |         |               |         |             
|                                     |                                                                                                                             |                            |         | (unaudited)   |         |              |         |        
|ASSETS                               |                                                                                                                             |                            |         |               |         |              |         |        
|Current assets:                      |                                                                                                                             |                            |         |               |         |              |         |        
|                                     | Cash and cash equivalents                                                                                                   |                            | $       | 58,991        |         |              | $       | 60,864  |        
|                                     | Short-term investments                                                                                                      |                            |         | 66,709        |         |              |         | 75,769  |        
|                                     | Accounts receivable, less reserves of
$2,360 and $2,207 in 2003 and 2002,
respectively                                      |                            |         | 28,899        |         |              |         | 18,981  |        
|                                     | Inventories                                                                                                                 |                            |         | 15,152        |         |              |         | 18,952  |        
|                                     | Deferred income taxes                                                                                                       |                            |         | 9,623         |         |              |         | 9,969   |        
|                                     | Prepaid expenses and other current assets                                                                                   |                            |         | 11,631        |         |              |         | 9,256   |        
|                                     |                                                                                                                             |                            |         |               |         |              |         |         |        
|                                     |                                                                                                                             | Total current assets       |         |               | 191,005 |              |         |         | 193,791 | 
|Long-term investments                |                                                                                                                             |                            | 172,671 |               |         |              | 139,352 |        
|Property, plant, and equipment, net  |                                                                                                                             |                            | 25,083  |               |         |              | 27,405  |        
|Deferred income taxes                |                                                                                                                             |                            | 19,208  |               |         |              | 16,608  |        
|Intangible assets, net               |                                                                                                                             |                            | 5,517   |               |         |              | 919     |        
|Goodwill, net                        |                                                                                                                             |                            | 5,376   |               |         |              | 3,742   |        
|Other assets                         |                                                                                                                             |                            | 3,775   |               |         |              | 3,686   |        
|                                     |                                                                                                                             |                            |         |               |         |              |         |         |        
|                                     |                                                                                                                             | $                          | 422,635 |               |         | $            | 385,503 |        
|                                     |                                                                                                                             |                            |         |               |         |              |         |         |        
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                             |                            |         |               |         |              |         |        
|Current liabilities:                 |                                                                                                                             |                            |         |               |         |              |         |        
|                                     | Accounts payable                                                                                                            |                            | $       | 4,142         |         |              | $       | 3,496   |        
|                                     | Accrued expenses                                                                                                            |                            |         | 26,640        |         |              |         | 19,972  |        
|                                     | Customer deposits                                                                                                           |                            |         | 4,900         |         |              |         | 3,659   |        
|                                     | Deferred revenue                                                                                                            |                            |         | 6,864         |         |              |         | 3,856   |        
|                                     |                                                                                                                             |                            |         |               |         |              |         |         |        
|                                     |                                                                                                                             | Total current liabilities  |         |               | 42,546  |              |         |         | 30,983  | 
|Commitments (Notes 3, 7, 8, and 9)   |                                                                                                                             |                            |         |               |         |              |         |        
|Stockholders equity:                |                                                                                                                             |                            |         |               |         |              |         |        
|                                     | Common stock, $.002 par value 
Authorized: 140,000 shares, issued: 47,931 and 46,877 shares in
2003 and 2002, respectively |                            |         | 96            |         |              |         | 94      |        
|                                     | Additional paid-in capital                                                                                                  |                            |         | 205,136       |         |              |         | 184,595 |        
|                                     | Treasury stock, at cost, 4,249 and 4,253 shares in 2003 and 2002,
respectively                                              |                            |         | (72,446       | )       |              |         | (72,311 | )      
|                                     | Retained earnings                                                                                                           |                            |         | 255,640       |         |              |         | 248,010 |        
|                                     | Accumulated other comprehensive loss                                                                                        |                            |         | (8,337        | )       |              |         | (5,868  | )      
|                                     |                                                                                                                             |                            |         |               |         |              |         |         |        
|                                     |                                                                                                                             | Total stockholders equity |         |               | 380,089 |              |         |         | 354,520 | 
|                                     |                                                                                                                             |                            |         |               |         |              |         |         |        
|                                     |                                                                                                                             | $                          | 422,635 |               |         | $            | 385,503 |        
|                                     |                                                                                                                             |                            |         |               |         |              |         |         |        

The accompanying notes are an integral part of these consolidated financial
statements.

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COGNEX CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
(In thousands)



|                                          |                                                                       |                                                                                                |        |              |  |            |    |                |  |        |         |        |  |  |       |   |  |   |         |      |   | 
|----------------------------------------- | --------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ------ | ------------ |  | ---------- | -- | -------------- |  | ------ | ------- | ------ |  |  | ----- | - |  | - | ------- | ---- | - | 
|                                          |                                                                       |                                                                                                |        | Common Stock |  | Additional |    | Treasury Stock
|                                          |                                                                       |                                                                                                |        |              |  | Paid-in    |    |               
|                                          |                                                                       |                                                                                                |        | Shares       |  | Par Value  |    | Capital        |  | Shares |         | Cost  
|                                          |                                                                       |                                                                                                |        |              |  |            |    |                |  |        |         |       
|Balance at December 31, 2002              |                                                                       |                                                                                                | 46,877 |              |  | $          | 94 |                |  | $      | 184,595 |        |  |  | 4,249 |   |  | $ | (72,311 | )   
|                                          | Issuance of stock under stock option, stock
purchase, and other plans |                                                                                                |        | 1,054        |  |            |    | 2              |  |        |         | 17,311 |  |  |       | 4 |  |   |         | (135 | )
|                                          | Tax benefit from exercise of stock options                            |                                                                                                |        |              |  |            |    |                |  |        |         | 3,230  |  |  |       |   |  |   |         |      |  
|                                          | Payment
of dividends                                                  |                                                                                                |        |              |  |            |    |                |  |        |         |        |  |  |       |   |  |   |         |      |  
|                                          | Comprehensive income:                                                 |                                                                                                |        |              |  |            |    |                |  |        |         |        |  |  |       |   |  |   |         |      |  
|                                          |                                                                       | Net income                                                                                     |        |              |  |            |    |                |  |        |         |        |  |  |       |   |  |   |         |      |   | 
|                                          |                                                                       | Losses on foreign intercompany loans,
net of gains on cross currency swaps,
net of tax of $276 |        |              |  |            |    |                |  |        |         |        |  |  |       |   |  |   |         |      |   | 
|                                          |                                                                       | Foreign currency translation adjustment                                                        |        |              |  |            |    |                |  |        |         |        |  |  |       |   |  |   |         |      |   | 
|                                          |                                                                       | Comprehensive income                                                                           |        |              |  |            |    |                |  |        |         |        |  |  |       |   |  |   |         |      |   | 
|                                          |                                                                       |                                                                                                |        |              |  |            |    |                |  |        |         |        |  |  |       |   |  |   |         |     
|Balance at September 28, 2003 (unaudited) |                                                                       |                                                                                                | 47,931 |              |  | $          | 96 |                |  | $      | 205,136 |        |  |  | 4,253 |   |  | $ | (72,446 | )   
|                                          |                                                                       |                                                                                                |        |              |  |            |    |                |  |        |         |        |  |  |       |   |  |   |         |     

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                          |                                                                       |                                                                                                |         |          |        |               |        |               |        |               |  |   |        |       |         |        |        |  
|----------------------------------------- | --------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ------- | -------- | ------ | ------------- | ------ | ------------- | ------ | ------------- |  | - | ------ | ----- | ------- | ------ | ------ | -
|                                          |                                                                       |                                                                                                |         |          |        |               |        | Accumulated   |        |               |  |   |        |       |         |       
|                                          |                                                                       |                                                                                                |         |          |        |               |        | Other         |        |               |  |   |        | Total
|                                          |                                                                       |                                                                                                |         | Retained |        | Comprehensive |        | Comprehensive |        | Stockholders
|                                          |                                                                       |                                                                                                |         | Earnings |        | Loss          |        | Income        |        | Equity       
|                                          |                                                                       |                                                                                                |         |          |        |               |        |               |        |              
|Balance at December 31, 2002              |                                                                       | $                                                                                              | 248,010 |          |        | $             | (5,868 | )             |        |               |  |   |        | $     | 354,520 |       
|                                          | Issuance of stock under stock option, stock
purchase, and other plans |                                                                                                |         |          |        |               |        |               |        |               |  |   |        |       |         | 17,178 |       
|                                          | Tax benefit from exercise of stock options                            |                                                                                                |         |          |        |               |        |               |        |               |  |   |        |       |         | 3,230  |       
|                                          | Payment of dividends                                                  |                                                                                                |         | (2,607   | )      |               |        |               |        |               |  |   |        |       |         | (2,607 | )     
|                                          | Comprehensive income:                                                 |                                                                                                |         |          |        |               |        |               |        |               |  |   |        |       |         |        |       
|                                          |                                                                       | Net income                                                                                     |         |          | 10,237 |               |        |               |        |               |  | $ | 10,237 |       |         |        | 10,237 |  
|                                          |                                                                       | Losses on foreign intercompany loans,
net of gains on cross currency swaps,
net of tax of $276 |         |          |        |               |        |               | (470   | )             |  |   | (470   | )     |         |        | (470   | )
|                                          |                                                                       | Foreign currency translation adjustment                                                        |         |          |        |               |        |               | (1,999 | )             |  |   | (1,999 | )     |         |        | (1,999 | )
|                                          |                                                                       |                                                                                                |         |          |        |               |        |               |        |               |  |   |        |       |         |       
|                                          |                                                                       | Comprehensive income                                                                           |         |          |        |               |        |               |        |               |  | $ | 7,768  |       |         |        |        |  
|                                          |                                                                       |                                                                                                |         |          |        |               |        |               |        |               |  |   |        |       |         |       
|Balance at September 28, 2003 (unaudited) |                                                                       | $                                                                                              | 255,640 |          |        | $             | (8,337 | )             |        |               |  |   |        | $     | 380,089 |       
|                                          |                                                                       |                                                                                                |         |          |        |               |        |               |        |               |  |   |        |       |         |       

The accompanying notes are an integral part of
these consolidated financial statements.

3



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COGNEX CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)

|                                                     |                                                                                          |                                                  |        |                   |        |               |        |         |        |  
|---------------------------------------------------- | ---------------------------------------------------------------------------------------- | ------------------------------------------------ | ------ | ----------------- | ------ | ------------- | ------ | ------- | ------ | -
|                                                     |                                                                                          |                                                  |        | Nine Months Ended
|                                                     |                                                                                          |                                                  |        | September 28,     |        | September 29,
|                                                     |                                                                                          |                                                  |        | 2003              |        | 2002         
|                                                     |                                                                                          |                                                  |        |                   |        |              
|                                                     |                                                                                          |                                                  |        | (unaudited)      
|Cash flows from operating activities:                |                                                                                          |                                                  |        |                   |        |               |        |        
|                                                     | Net income (loss)                                                                        |                                                  | $      | 10,237            |        |               | $      | (6,451  | )     
|                                                     | Adjustments to reconcile net income (loss) to net
cash provided by operating activities: |                                                  |        |                   |        |               |        |         |       
|                                                     |                                                                                          | Depreciation and amortization                    |        |                   | 7,530  |               |        |         | 7,153  |  
|                                                     |                                                                                          | Tax benefit from exercise of stock options       |        |                   | 3,230  |               |        |         | 1,686  |  
|                                                     |                                                                                          | Loss on sale of equity securities                |        |                   |       |               |        |         | 6,184  |  
|                                                     |                                                                                          | Deferred income tax benefit                      |        |                   | (1,749 | )             |        |         | (611   | )
|                                                     |                                                                                          | Change in current assets and current liabilities |        |                   | (64    | )             |        |         | (2,012 | )
|                                                     |                                                                                          | Other                                            |        |                   | 812    |               |        |         | 618    |  
|                                                     |                                                                                          |                                                  |        |                   |        |               |        |         |       
|                                                     | Net cash provided by operating activities                                                |                                                  |        | 19,996            |        |               |        | 6,567   |       
|Cash flows from investing activities:                |                                                                                          |                                                  |        |                   |        |               |        |        
|                                                     | Purchase of investments                                                                  |                                                  |        | (131,119          | )      |               |        | (66,489 | )     
|                                                     | Maturity and sale of investments                                                         |                                                  |        | 103,395           |        |               |        | 102,010 |       
|                                                     | Purchase of property, plant, and equipment                                               |                                                  |        | (1,570            | )      |               |        | (1,628  | )     
|                                                     | Cash paid for business acquisitions                                                      |                                                  |        | (7,630            | )      |               |        | (349    | )     
|                                                     |                                                                                          |                                                  |        |                   |        |               |        |         |       
|                                                     | Net cash provided by (used in) investing activities                                      |                                                  |        | (36,924           | )      |               |        | 33,544  |       
|Cash flows from financing activities:                |                                                                                          |                                                  |        |                   |        |               |        |        
|                                                     | Repurchase of common stock                                                               |                                                  |        |                  |        |               |        | (26,425 | )     
|                                                     | Payment of dividends                                                                     |                                                  |        | (2,607            | )      |               |        |        |       
|                                                     | Issuance of stock under stock option, stock
purchase, and other plans                    |                                                  |        | 17,178            |        |               |        | 5,538   |       
|                                                     |                                                                                          |                                                  |        |                   |        |               |        |         |       
|                                                     | Net cash provided by (used in) financing activities                                      |                                                  |        | 14,571            |        |               |        | (20,887 | )     
|Effect of foreign exchange rate changes on cash      |                                                                                          |                                                  | 484    |                   |        |               | (3,776 | )      
|                                                     |                                                                                          |                                                  |        |                   |        |               |        |         |       
|Net increase (decrease) in cash and cash equivalents |                                                                                          |                                                  | (1,873 | )                 |        |               | 15,448 |        
|Cash and cash equivalents at beginning of period     |                                                                                          |                                                  | 60,864 |                   |        |               | 31,660 |        
|                                                     |                                                                                          |                                                  |        |                   |        |               |        |         |       
|Cash and cash equivalents at end of period           |                                                                                          | $                                                | 58,991 |                   |        | $             | 47,108 |        
|                                                     |                                                                                          |                                                  |        |                   |        |               |        |         |       

The accompanying notes are an integral part of these consolidated financial
statements.

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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: Summary of Significant Accounting Policies

As permitted by the rules of the Securities and Exchange Commission applicable
to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain
all disclosures required by generally accepted accounting principles.
Reference should be made to the consolidated financial statements and related
notes included in the Companys Annual Report on Form 10-K for the year ended
December 31, 2002.

In the opinion of the management of Cognex Corporation, the accompanying
consolidated unaudited financial statements contain all adjustments necessary
to present fairly the Companys financial position at September 28, 2003, and
the results of its operations for the three-month and nine-month periods ended
September 28, 2003 and September 29, 2002, and changes in stockholders equity
and cash flows for the periods presented.

The results disclosed in the Consolidated Statements of Operations for the
three-month and nine-month periods ended September 28, 2003 are not necessarily
indicative of the results to be expected for the full year. Certain amounts
reported in prior periods have been reclassified to be consistent with the
current period presentation.

Stock-Based Compensation Plans

The Company recognizes compensation costs using the intrinsic value based
method described in Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees. Net income (loss) and net income (loss) per share
as reported in these consolidated financial statements and on a pro forma
basis, as if the fair value based method described in Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation, had
been adopted, are as follows:

|                                                                                                |  |                    |        |                   |  |               |        |               |  |   |         |   |  |   |         |  
|----------------------------------------------------------------------------------------------- |  | ------------------ | ------ | ----------------- |  | ------------- | ------ | ------------- |  | - | ------- | - |  | - | ------- | -
|                                                                                                |  | Three Months Ended |        | Nine Months Ended
|                                                                                                |  | September 28,      |        | September 29,     |  | September 28, |        | September 29,
|                                                                                                |  | 2003               |        | 2002              |  | 2003          |        | 2002         
|                                                                                                |  |                    |        |                   |  |               |        |              
|Net income (loss), as reported                                                                  |  | $                  | 5,138  |                   |  | $             | 781    |               |  | $ | 10,237  |   |  | $ | (6,451  | )
|Less: Total stock-based compensation costs
determined under fair value based method, net
of tax |  |                    | (3,725 | )                 |  |               | (2,783 | )             |  |   | (10,646 | ) |  |   | (12,693 | )
|                                                                                                |  |                    |        |                   |  |               |        |               |  |   |         |   |  |   |         |  
|Net income (loss), pro forma                                                                    |  | $                  | 1,413  |                   |  | $             | (2,002 | )             |  | $ | (409    | ) |  | $ | (19,144 | )
|                                                                                                |  |                    |        |                   |  |               |        |               |  |   |         |   |  |   |         |  
|Basic net income (loss) per share, as
reported                                                  |  | $                  | .12    |                   |  | $             | .02    |               |  | $ | .24     |   |  | $ | (.15    | )
|Basic net income (loss) per share, pro
forma                                                    |  | $                  | .03    |                   |  | $             | (.05   | )             |  | $ | (.01    | ) |  | $ | (.44    | )
|Diluted net income (loss) per share, as
reported                                                |  | $                  | .11    |                   |  | $             | .02    |               |  | $ | .23     |   |  | $ | (.15    | )
|Diluted net income (loss) per share, pro
forma                                                  |  | $                  | .03    |                   |  | $             | (.05   | )             |  | $ | (.01    | ) |  | $ | (.44    | )

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##### Table of Contents



COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1: Summary of Significant Accounting Policies (continued)

For the purpose of providing pro forma disclosures, the fair values of stock
options granted were estimated using the Black-Scholes option-pricing model
with the following weighted-average assumptions:

|                                   |  |                    |     |                   |  |               |     |               |  |  |     |   |  |  |     |  
|---------------------------------- |  | ------------------ | --- | ----------------- |  | ------------- | --- | ------------- |  |  | --- | - |  |  | --- | -
|                                   |  | Three Months Ended |     | Nine Months Ended
|                                   |  | September 28,      |     | September 29,     |  | September 28, |     | September 29,
|                                   |  | 2003               |     | 2002              |  | 2003          |     | 2002         
|                                   |  |                    |     |                   |  |               |     |              
|Risk-free interest rate            |  |                    | 2.9 | %                 |  |               | 3.5 | %             |  |  | 2.0 | % |  |  | 3.5 | %
|Expected life (in years)           |  |                    | 3.2 |                   |  |               | 3.1 |               |  |  | 2.9 |   |  |  | 2.8 |  
|Expected volatility                |  |                    | 57  | %                 |  |               | 61  | %             |  |  | 57  | % |  |  | 61  | %
|Expected annualized dividend yield |  |                    | .92 | %                 |  |               |    |               |  |  | .92 | % |  |  |    |  

NOTE 2: New Pronouncements

In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, Consolidation of Variable Interest Entities, to expand
upon and strengthen existing accounting guidance that addresses when a company
should include in its financial statements the assets, liabilities, and
activities of another entity. Previously, a company generally has included
other entities in its consolidated financial statements only if it controlled
the entity through voting interests. Interpretation No. 46 changes that
guidance by requiring variable interest entities, as defined, to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entitys activities or is entitled to
receive a majority of the entitys residual returns. Interpretation No. 46
also requires disclosure about variable interest entities that a company is not
required to consolidate, but in which it has a significant variable interest.
On October 8, 2003, the FASB deferred the effective date of Interpretation No.
46 until periods ending after December 15, 2003. The Company does not believe
the adoption of Interpretation No. 46 will have a material impact on its
consolidated financial statements.

NOTE 3: Cash, Cash Equivalents, and Investments

Cash, cash equivalents, and investments consist of the following:

|                                  |                                 |      |               |         |              |   |         |         | 
|--------------------------------- | ------------------------------- | ---- | ------------- | ------- | ------------ | - | ------- | ------- | 
|                                  |                                 |      | September 28, |         | December 31,
|(In thousands)                    |                                 | 2003 |               | 2002   
|                                  |                                 |      |               |         |             
|Cash                              |                                 | $    | 41,551        |         |              | $ | 58,424  |        
|Municipal obligations             |                                 |      | 17,440        |         |              |   | 2,440   |        
|                                  |                                 |      |               |         |              |   |         |        
|                                  | Total cash and cash
equivalents |      |               | 58,991  |              |   |         | 60,864  | 
|                                  |                                 |      |               |         |              |   |         |        
|Municipal
obligations             |                                 |      | 66,709        |         |              |   | 75,769  |        
|                                  |                                 |      |               |         |              |   |         |        
|                                  | Total short-term
investments    |      |               | 66,709  |              |   |         | 75,769  | 
|                                  |                                 |      |               |         |              |   |         |        
|Municipal
obligations             |                                 |      | 162,262       |         |              |   | 131,425 |        
|Investment in limited
partnership |                                 |      | 10,409        |         |              |   | 7,927   |        
|                                  |                                 |      |               |         |              |   |         |        
|                                  | Total long-term
investments     |      |               | 172,671 |              |   |         | 139,352 | 
|                                  |                                 |      |               |         |              |   |         |        
|                                  |                                 | $    | 298,371       |         |              | $ | 275,985 |        
|                                  |                                 |      |               |         |              |   |         |        

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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3: Cash, Cash Equivalents, and Investments (continued)

On June 30, 2000, Cognex Corporation became a Limited Partner in Venrock
Associates III, L.P., a venture capital fund. A director of the Company is a
Managing General Partner of Venrock Associates. The Company has committed to a
total investment in the limited partnership of up to $25,000,000, of which
$13,625,000 and $10,375,000 had been contributed as of September 28, 2003 and
December 31, 2002, respectively. The commitment to contribute capital expires
on January 1, 2005, and the Company does not have the right to withdraw from
the partnership prior to December 31, 2010.

During the nine-month period ended September 28, 2003, the Company recorded
$769,000 in realized losses on the funds investments and fund expenses that
were not offset by investment gains.

NOTE 4: Inventories

Inventories consist of the following:

|                |  |               |        |              |  |   |        | 
|--------------- |  | ------------- | ------ | ------------ |  | - | ------ | 
|                |  | September 28, |        | December 31,
|(In thousands)  |  | 2003          |        | 2002        
|                |  |               |        |             
|Raw materials   |  | $             | 8,542  |              |  | $ | 12,530 | 
|Work-in-process |  |               | 3,592  |              |  |   | 4,068  | 
|Finished goods  |  |               | 3,018  |              |  |   | 2,354  | 
|                |  |               |        |              |  |   |        | 
|                |  | $             | 15,152 |              |  | $ | 18,952 | 
|                |  |               |        |              |  |   |        | 

In the fourth quarter of 2001, the Company recorded a $16,300,000 charge in
Cost of product revenue on the Consolidated Statements of Operations for
excess inventories and purchase commitments resulting from an extended slowdown
in the semiconductor and electronics industries, as well as the expected
transition to newer Cognex hardware platforms by the Companys OEM customers.
A total of $12,500,000 of this charge represented reserves against existing
inventories and was accordingly included in Inventories on the Consolidated
Balance Sheet at December 31, 2001. The remaining $3,800,000 of the charge
represented commitments to purchase excess components and systems from various
suppliers and accordingly was included in Accrued Expenses on the
Consolidated Balance Sheet at December 31, 2001.

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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4: Inventories (continued)

The following table summarizes the changes in the inventory-related reserves
established in the fourth quarter of 2001 (in thousands):

|                                                     |  |               |        |                  |  |          |        |   |  |   |       | 
|---------------------------------------------------- |  | ------------- | ------ | ---------------- |  | -------- | ------ | - |  | - | ----- | 
|                                                     |  |               |        | Statement of    
|                                                     |  | Balance Sheet |        | Operations      
|                                                     |  |               |        |                 
|                                                     |  | Inventories   |        | Accrued Expenses |  | Benefits
|                                                     |  |               |        |                  |  |         
|Initial charge in the fourth quarter of 2001         |  | $             | 12,500 |                  |  | $        | 3,800  |   |  | $ |      | 
|Inventory sold to customers                          |  |               | (1,790 | )                |  |          |       |   |  |   | 1,790 | 
|Settlement of purchase commitments                   |  |               | 1,506  |                  |  |          | (2,400 | ) |  |   | 894   | 
|                                                     |  |               |        |                  |  |          |        |   |  |   |       | 
|Reserve balance at December 31, 2002                 |  |               | 12,216 |                  |  |          | 1,400  |   |  |   |       | 
|Benefits to cost of product revenue recorded in 2002 |  |               |        |                  |  |          |        |   |  | $ | 2,684 | 
|                                                     |  |               |        |                  |  |          |        |   |  |   |       | 
|Inventory sold to customers                          |  |               | (1,174 | )                |  |          |       |   |  | $ | 1,174 | 
|Inventory sold to brokers                            |  |               | (628   | )                |  |          |       |   |  |   |      | 
|Write-off and scrap of inventory                     |  |               | (828   | )                |  |          |       |   |  |   |      | 
|                                                     |  |               |        |                  |  |          |        |   |  |   |       | 
|Reserve balance at September 28, 2003                |  | $             | 9,586  |                  |  | $        | 1,400  |   |  |   |       | 
|                                                     |  |               |        |                  |  |          |        |   |  |   |       | 
|Benefits to cost of product revenue recorded in 2003 |  |               |        |                  |  |          |        |   |  | $ | 1,174 | 
|                                                     |  |               |        |                  |  |          |        |   |  |   |       | 

The Company is in the process of negotiating with vendors for the settlement of
the remaining purchase commitments, which may result in a recovery of a portion
of the remaining $1,400,000 accrued at September 28, 2003.

NOTE 5: Intangible Assets

Amortized intangible assets consist of the following (in thousands):

|                   |                                      |   |          |       |              |   |          |       |     |   |       |       | 
|------------------ | ------------------------------------ | - | -------- | ----- | ------------ | - | -------- | ----- | --- | - | ----- | ----- | 
|                   |                                      |   | Gross    |       |              |   |          |       | Net
|                   |                                      |   | Carrying |       | Accumulated  |   | Carrying
|                   |                                      |   | Amount   |       | Amortization |   | Amount  
|                   |                                      |   |          |       |              |   |         
|September 28, 2003 |                                      |   |          |       |              |   |          |       |     |   |       |      
|                   | Customer contracts and relationships |   | $        | 4,640 |              |   | $        | 290   |     |   | $     | 4,350 | 
|                   | Complete technology                  |   |          | 5,179 |              |   |          | 4,143 |     |   |       | 1,036 | 
|                   | Patents                              |   |          | 103   |              |   |          | 10    |     |   |       | 93    | 
|                   | Non-compete agreements               |   |          | 839   |              |   |          | 801   |     |   |       | 38    | 
|                   |                                      |   |          |       |              |   |          |       |     |   |       |       | 
|                   |                                      | $ | 10,761   |       |              | $ | 5,244    |       |     | $ | 5,517 |      
|                   |                                      |   |          |       |              |   |          |       |     |   |       |       | 
|December 31, 2002  |                                      |   |          |       |              |   |          |       |     |   |       |      
|                   | Complete technology                  |   | $        | 4,708 |              |   | $        | 3,789 |     |   | $     | 919   | 
|                   | Non-compete agreements               |   |          | 793   |              |   |          | 793   |     |   |       |      | 
|                   |                                      |   |          |       |              |   |          |       |     |   |       |       | 
|                   |                                      | $ | 5,501    |       |              | $ | 4,582    |       |     | $ | 919   |      
|                   |                                      |   |          |       |              |   |          |       |     |   |       |       | 

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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5: Intangible Assets (continued)

Aggregate amortization expense for the three-month and nine-month periods ended
September 28, 2003 was $280,000 and $662,000, respectively, and $138,000 and
$415,000 for the same periods in 2002.

Estimated amortization expense for each of the five succeeding fiscal years and
thereafter is as follows (in thousands):

|           |       |        |       |       |       | 
|---------- | ----- | ------ | ----- | ----- | ----- | 
|Year       |       | Amount
|           |       |       
|           |       | 2003   |       | $     | 942   | 
|           |       | 2004   |       |       | 1,118 | 
|           |       | 2005   |       |       | 812   | 
|           |       | 2006   |       |       | 699   | 
|           |       | 2007   |       |       | 695   | 
|Thereafter |       |        | 1,913 |      
|           |       |        |       |      
|           | Total |        | $     | 6,179 |      
|           |       |        |       |      

NOTE 6: Goodwill

The Company has two reporting units with goodwill, the Modular Vision Systems
Division (MVSD) and the Surface Inspection Systems Division (SISD), which are
also reportable segments.

The changes in the carrying amount of goodwill during the nine-month period
ended September 28, 2003 are as follows (in thousands):

|                               |  |      |       |      |  |              |       |  |  |   |       | 
|------------------------------ |  | ---- | ----- | ---- |  | ------------ | ----- |  |  | - | ----- | 
|                               |  | MVSD |       | SISD |  | Consolidated
|                               |  |      |       |      |  |             
|Balance at December 31, 2002   |  | $    | 1,488 |      |  | $            | 2,254 |  |  | $ | 3,742 | 
|Business acquisition (Note 12) |  |      | 1,353 |      |  |              |      |  |  |   | 1,353 | 
|Foreign exchange rate changes  |  |      | 72    |      |  |              | 209   |  |  |   | 281   | 
|                               |  |      |       |      |  |              |       |  |  |   |       | 
|Balance at September 28, 2003  |  | $    | 2,913 |      |  | $            | 2,463 |  |  | $ | 5,376 | 
|                               |  |      |       |      |  |              |       |  |  |   |       | 

The Company evaluates the possible impairment of goodwill annually each fourth
quarter, and whenever events or circumstances indicate that the carrying value
of the goodwill may not be recoverable. In the fourth quarter of 2002, this
analysis resulted in a fair value of each reporting unit that exceeded its
carrying amount, and therefore, the goodwill in each reporting unit was
determined not to be impaired. No events or circumstances have occurred during
2003 that would indicate an impairment of goodwill.

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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7: Warranty Obligations

The Company warrants its hardware products to be free from defects in material
and workmanship for periods ranging from six months to two years from the time
of sale based upon the product being purchased and the terms of the customers
contract. Estimated warranty obligations are evaluated and recorded at the
time of sale based upon historical costs to fulfill warranty obligations.
Warranty obligations are included in Accrued expenses on the Consolidated
Balance Sheets.

The changes in the warranty obligation are as follows (in thousands):

|                                                   |  |   |        |  
|-------------------------------------------------- |  | - | ------ | -
|Balance at December 31, 2002                       |  | $ | 1,523  |  
|Provisions for warranties issued during the period |  |   | 1,243  |  
|Provisions related to pre-existing warranties      |  |   | 550    |  
|Fulfillment of warranty obligations                |  |   | (1,313 | )
|Foreign exchange rate changes                      |  |   | 89     |  
|                                                   |  |   |        |  
|Balance at September 28, 2003                      |  | $ | 2,092  |  
|                                                   |  |   |        |  

NOTE 8: Indemnification Provisions

Except as limited by Massachusetts law, the by-laws of the Company require it
to indemnify certain current or former directors, officers, and employees of
the Company against expenses incurred by them in connection with each
proceeding in which he or she is involved as a result of serving or having
served in certain capacities. Indemnification is not available with respect to
a proceeding as to which it has been adjudicated that the person did not act in
good faith in the reasonable belief that the action was in the best interests
of the Company. The maximum potential amount of future payments the Company
could be required to make under these provisions is unlimited. The Company has
never incurred significant costs related to these indemnification provisions.
As a result, the Company believes the estimated fair value of these provisions
is minimal and has not recorded any related liabilities as of September 28,
2003.

The Company accepts standard limited indemnification provisions in the ordinary
course of business, whereby it indemnifies its customers for certain direct
damages incurred in connection with third-party patent or other intellectual
property infringement claims with respect to the use of the Companys products.
The term of these indemnification provisions generally coincides with the
customers use of the Companys products. The maximum potential amount of
future payments the Company could be required to make under these provisions is
always subject to fixed monetary limits. The Company has never incurred
significant costs to defend lawsuits or settle claims related to these
indemnification provisions. As a result, the Company believes the estimated
fair value of these provisions is minimal and has not recorded any related
liabilities as of September 28, 2003.

The Company also accepts limited indemnification provisions from time to time,
whereby it indemnifies customers for certain direct damages incurred in
connection with bodily injury and property damage arising from the installation
of the Companys products. The term of these indemnification provisions
generally coincides with the period of installation. The maximum potential
amount of future payments the Company could be required to make under these
provisions is limited and is likely recoverable under the Companys insurance
policies. As a result of this coverage, and the fact that the Company has
never incurred significant costs to defend lawsuits or settle claims related to
these indemnification provisions, the Company believes the estimated fair value
of these provisions is minimal and has not recorded any related liabilities as
of September 28, 2003.

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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9: Bank Guarantees

On May 27, 2003, the Company provided bank guarantees totaling 3,051,000,000
Yen (or approximately $27,295,000 based upon the exchange rate at September 28,
2003) to taxing authorities in Japan. The Tokyo Regional Taxation Bureau
(TRTB) has asserted that Cognex Corporation has a permanent establishment in
Japan that would require certain income, previously reported on U.S. tax
returns for the years ended December 31, 1997 through December 31, 2001, to be
subject instead to taxation in Japan. The Company disagrees with this position
and believes that this assertion is inconsistent with principles under the U.S.
 Japan income tax treaty. The Company has filed a notice of objection and
request for deferral of tax payment and intends to contest this assessment
vigorously, although no assurances can be made that the Company will prevail in
this matter. In September 2003, the Company also filed a request with the
Internal Revenue Service Tax Treaty Division for competent authority
assistance. Until this matter is resolved, the Company is required to provide
bank guarantees to collateralize these tax assessments. These guarantees
expire in approximately one year. Should the TRTB prevail in its assertion,
the income in question would be taxable in Japan and the Company would be
required to pay
approximately $25,494,000 in taxes, interest, and penalties to Japanese taxing
authorities. The Company would then be entitled to recoup the majority of this
amount from taxing authorities in the U.S.

NOTE 10: Net Income (Loss) Per Share

Net income (loss) per share is calculated as follows:

|                                         |                                                                  |      |                    |        |                   |      |               |        |               |   |        |        |  |   |        |        |  
|---------------------------------------- | ---------------------------------------------------------------- | ---- | ------------------ | ------ | ----------------- | ---- | ------------- | ------ | ------------- | - | ------ | ------ |  | - | ------ | ------ | -
|                                         |                                                                  |      | Three Months Ended |        | Nine Months Ended
|                                         |                                                                  |      | September 28,      |        | September 29,     |      | September 28, |        | September 29,
|(In thousands, except per share amounts) |                                                                  | 2003 |                    | 2002   |                   | 2003 |               | 2002  
|                                         |                                                                  |      |                    |        |                   |      |               |       
|Net income (loss)                        |                                                                  | $    | 5,138              |        |                   | $    | 781           |        |               | $ | 10,237 |        |  | $ | (6,451 | )     
|                                         |                                                                  |      |                    |        |                   |      |               |        |               |   |        |        |  |   |        |       
|Basic:                                   |                                                                  |      |                    |        |                   |      |               |        |               |   |        |        |  |   |        |       
|                                         | Weighted-average common shares
outstanding                       |      |                    | 43,153 |                   |      |               | 43,309 |               |   |        | 42,947 |  |   |        | 43,817 |  
|                                         |                                                                  |      |                    |        |                   |      |               |        |               |   |        |        |  |   |        |       
|                                         | Net income (loss) per common share                               |      | $                  | .12    |                   |      | $             | .02    |               |   | $      | .24    |  |   | $      | (.15   | )
|                                         |                                                                  |      |                    |        |                   |      |               |        |               |   |        |        |  |   |        |       
|Diluted:                                 |                                                                  |      |                    |        |                   |      |               |        |               |   |        |        |  |   |        |       
|                                         | Weighted-average common shares
outstanding                       |      |                    | 43,153 |                   |      |               | 43,309 |               |   |        | 42,947 |  |   |        | 43,817 |  
|                                         | Effect of dilutive stock options                                 |      |                    | 1,737  |                   |      |               | 442    |               |   |        | 1,173  |  |   |        |       |  
|                                         |                                                                  |      |                    |        |                   |      |               |        |               |   |        |        |  |   |        |       
|                                         | Weighted-average
common and common-equivalent shares outstanding |      |                    | 44,890 |                   |      |               | 43,751 |               |   |        | 44,120 |  |   |        | 43,817 |  
|                                         |                                                                  |      |                    |        |                   |      |               |        |               |   |        |        |  |   |        |       
|                                         | Net income (loss) per common and
common-equivalent share         |      | $                  | .11    |                   |      | $             | .02    |               |   | $      | .23    |  |   | $      | (.15   | )
|                                         |                                                                  |      |                    |        |                   |      |               |        |               |   |        |        |  |   |        |       

The Company has excluded stock options to purchase 2,443,727 and 4,042,697
shares of common stock for the three-month and nine-month periods ended
September 28, 2003, respectively, and 7,775,576 and 4,925,196 for the same
periods in 2002 from the calculation of diluted net income (loss) per common
share because the options exercise prices were greater than the average market
price of the Companys common stock during those periods. Additionally, stock
options to purchase 985,100 shares of common stock were not included in the
calculation of diluted net loss per common share for the nine-month period
ended September 29, 2002 because they were antidilutive. Although these stock
options and potential common stock equivalents were antidilutive for the
periods presented, they may be dilutive in future periods calculations.

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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11: Segment Information

The Company has two reportable segments: the Modular Vision Systems Division
(MVSD) and the Surface Inspections Systems Division (SISD). MVSD designs,
develops, manufactures, and markets modular vision systems that are used to
control the manufacturing of discrete items by locating, identifying,
inspecting, and measuring them during the manufacturing process. SISD designs,
develops, manufactures, and markets surface inspection vision systems that are
used to inspect surfaces of materials that are processed in a continuous
fashion to ensure there are no flaws or defects in the surfaces. Segments are
determined based upon the way that management organizes its business for making
operating decisions and assessing performance. The Company evaluates segment
performance based upon income or loss from operations, excluding unusual items.

The following table summarizes information about the Companys segments (in
thousands):

|                                      |                         |  |      |        |      |  |       |        |              |  |             |        |   |  |   |         |  
|------------------------------------- | ----------------------- |  | ---- | ------ | ---- |  | ----- | ------ | ------------ |  | ----------- | ------ | - |  | - | ------- | -
|                                      |                         |  |      |        |      |  |       |        |              |  | Reconciling |        |   |  |  
|                                      |                         |  | MVSD |        | SISD |  | Items |        | Consolidated
|                                      |                         |  |      |        |      |  |       |        |             
|Three Months Ended
September 28, 2003 |                         |  |      |        |      |  |       |        |              |  |             |        |   |  |   |        
|                                      | Product revenue         |  | $    | 28,777 |      |  | $     | 5,188  |              |  | $           |       |   |  | $ | 33,965  |  
|                                      | Service revenue         |  |      | 3,100  |      |  |       | 1,639  |              |  |             |       |   |  |   | 4,739   |  
|                                      | Operating income        |  |      | 5,960  |      |  |       | 613    |              |  |             | (1,066 | ) |  |   | 5,507   |  
|Nine Months Ended
September 28, 2003  |                         |  |      |        |      |  |       |        |              |  |             |        |   |  |   |        
|                                      | Product revenue         |  | $    | 77,929 |      |  | $     | 15,675 |              |  | $           |       |   |  | $ | 93,604  |  
|                                      | Service revenue         |  |      | 9,760  |      |  |       | 4,850  |              |  |             |       |   |  |   | 14,610  |  
|                                      | Operating income        |  |      | 13,148 |      |  |       | 2,304  |              |  |             | (3,589 | ) |  |   | 11,863  |  
|Three Months Ended
September 29, 2002 |                         |  |      |        |      |  |       |        |              |  |             |        |   |  |   |        
|                                      | Product revenue         |  | $    | 22,128 |      |  | $     | 5,140  |              |  | $           |       |   |  | $ | 27,268  |  
|                                      | Service revenue         |  |      | 2,932  |      |  |       | 1,627  |              |  |             |       |   |  |   | 4,559   |  
|                                      | Operating income (loss) |  |      | (703   | )    |  |       | 694    |              |  |             | (1,494 | ) |  |   | (1,503  | )
|Nine Months Ended
September 29, 2002  |                         |  |      |        |      |  |       |        |              |  |             |        |   |  |   |        
|                                      | Product revenue         |  | $    | 53,543 |      |  | $     | 13,387 |              |  | $           |       |   |  | $ | 66,930  |  
|                                      | Service revenue         |  |      | 8,915  |      |  |       | 4,433  |              |  |             |       |   |  |   | 13,348  |  
|                                      | Operating income (loss) |  |      | (6,677 | )    |  |       | 1,316  |              |  |             | (5,756 | ) |  |   | (11,117 | )

Reconciling items include benefits from the sale of previously reserved
inventory of $296,000 and $1,174,000 for the three-month and nine-month periods
ended September 28, 2003 and $1,156,000 and $2,156,000 for the same periods in
2002. These items relate to the MVSD segment and are not included in the
segments operating income (loss) for the purpose of making operating decisions
and assessing performance. Reconciling items also consist of unallocated
corporate expenses that totaled $1,362,000 and $4,763,000 for the three-month
and nine-month periods ended September 28, 2003 and $2,650,000 and $7,912,000
for the same periods in 2002. These expenses primarily include corporate
headquarters costs and patent infringement litigation. Asset information by
segment is not produced internally for use by the chief operating decision
maker, and therefore, is not presented.

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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12: Acquisition of Siemens Dematic AG Wafer Identification Business

On March 31, 2003, the Company acquired the wafer identification business of
Siemens Dematic AG, a subsidiary of Siemens AG. Siemens Dematic is a leading
supplier of logistics and factory automation equipment and has been a leading
supplier of wafer identification systems to semiconductor manufacturers in
Europe. Under the terms of the agreement, the Company acquired the rights to
all of Siemens patented and unpatented wafer identification technology, as
well as substantially all of the assets related to its wafer identification
business. This acquisition enhances the Companys position as a leading
provider of wafer identification systems worldwide. The results of operations
of the acquired business have been included in the Companys consolidated
results of operations since the date of the acquisition. The historical
results of operations of the acquired business were not material compared to
the consolidated results of operations, and therefore, pro forma results are
not presented.

The purchase price consisted of 7,000,000 Euros in cash (or $7,630,000) paid on
March 31, 2003, with the potential for an additional cash payment in 2005 of up
to 1,700,000 Euros (or approximately $1,951,000 based upon the exchange rate at
September 28, 2003) depending upon the achievement of certain performance
criteria. The contingent consideration will be recorded as purchase price when
paid and will be allocated to goodwill. The March 31, 2003 cash payment of
7,000,000 Euros was based upon an estimated balance sheet for the wafer
identification business as of March 31, 2003. The Company is in the process of
reviewing the actual March 31, 2003 balance sheet and the cash payment may be
adjusted during the fourth quarter of 2003 based upon the outcome of this
review, with such adjustment allocated to goodwill.

The purchase price was allocated as follows: $616,000 to inventories; $628,000
to receivables; $25,000 to accrued expenses; $4,469,000 to customer contracts
and relationships, to be amortized over eight years; $447,000 to complete
technology, to be amortized over five years; $98,000 to patents, to be
amortized over five years; $44,000 to non-compete agreements, to be amortized
over three years; and $1,353,000 to goodwill, which is assigned to the MVSD
segment and is not deductible for tax purposes.

NOTE 13: Dividends

On August 5, 2003, the Companys Board of Directors declared a cash dividend of
$0.06 per share. The dividend was paid on September 19, 2003 to all
stockholders of record at the close of business on August 29, 2003. On October
24, 2003, the Companys Board of Directors declared a cash dividend of $0.06
per share. The dividend is payable on November 25, 2003 to all stockholders of
record at the close of business on November 10, 2003. Future dividends will be
declared at the discretion of the Board of Directors and will depend upon such
factors as the Board of Directors deems relevant. The Board of Directors may
modify the Companys dividend policy from time to time.

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ITEM 2: MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

Certain statements made in this report, as well as oral statements made by the
Company from time to time, 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 the Companys use of the words expects,
anticipates, estimates, believes, projects, intends, plans, will,
may, shall, and similar words and other statements of a similar sense.
These statements are based upon 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, like any other forward-looking statements,
involve known and unknown risks and uncertainties that could cause actual
results to differ materially from those projected. Such risks and
uncertainties include: (1) the effects of the general economic slowdown,
including the worldwide slowdown in capital spending and the
uncertainty of the timing and rate of recovery; (2) the cyclicality of the
semiconductor and electronics industries; (3) the Companys continued ability
to achieve significant international revenue; (4) the loss of, or a significant
curtailment of purchases by, any one or more principal customers; (5) the
reliance upon certain sole source suppliers to manufacture or deliver critical
components for the Companys products; (6) the inability to design and
manufacture high-quality products; (7) the inability to attract or retain
skilled employees; (8) the inability to forecast customer demand accurately;
(9) the technological obsolescence of current products and the inability to
develop new products; (10) the inability to protect the Companys proprietary
technology and intellectual property; (11) the Companys involvement in
time-consuming and costly litigation; (12) the inability to respond to
competitive technology and pricing pressures; (13) changes in foreign exchange
rates; and (14) the inability to achieve expected results from acquisitions.
The foregoing list should not be construed as exhaustive and the Company
encourages readers to refer to the discussion of risk factors included in Part
I  Item 1 of the Companys Annual Report on Form 10-K for the fiscal year
ended December 31, 2002. The Company cautions 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 to subsequently 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.

Results of Operations

Revenue

Revenue for the three-month and nine-month periods ended September 28, 2003
totaled $38,704,000 and $108,214,000, respectively, compared to $31,827,000 and
$80,278,000 for the same periods in 2002, representing a 22% increase for the
three-month period and a 35% increase for the nine-month period. Sales to
Original Equipment Manufacturers (OEM) customers, most of whom make capital
equipment used by manufacturers in the semiconductor and electronics
industries, increased $4,858,000, or 46%, from the three-month period in 2002
and $16,250,000, or 66%, from the nine-month period in 2002. Sales to end-user
customers increased $2,019,000, or 9%, from the three-month period in 2002 and
$11,686,000, or 21%, from the nine-month period in 2002, due to higher demand
from customers across a variety of industries. Sales to end-user customers
represented 60% and 62% of total revenue for the three-month and nine-month
periods ended September 28, 2003 compared to 67% and 70% for the same periods
in 2002. Geographically, the increase in revenue from the prior year was most
significant in Japan, where many of the Companys OEM customers are located.

Product revenue for the three-month and nine-month periods ended September 28,
2003 totaled $33,965,000 and $93,604,000, respectively, compared to $27,268,000
and $66,930,000 for the same periods in 2002, representing a 25% increase for
the three-month period and a 40% increase for the nine-month period. The
increase in product revenue was primarily due to a higher volume of machine
vision systems sold to customers in the semiconductor, electronics, automotive,
metals, and other industries. Service revenue, which is derived from the sale
of maintenance and support, education, consulting, and installation services,
totaled $4,739,000 and $14,610,000 for the three-month and nine-month periods
ended September 28, 2003, respectively, compared to $4,559,000 and $13,348,000
for the same periods

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in 2002, representing a 4% increase for the three-month
period and a 9% increase for the nine-month period. Many of the Companys
products that were sold during 2003 included bundled maintenance and support
programs for which a portion of the revenue will be recognized in future
quarters over the program period. As a result, service revenue did not
increase as dramatically as product revenue, and it decreased as a percentage
of total revenue to 12% and 14% for the three-month and nine-month periods
ended September 28, 2003, respectively, compared to 14% and 17% for the same
periods in 2002.

MVSD revenue for the three-month and nine-month periods ended September 28,
2003 totaled $31,877,000 and $87,689,000, respectively, compared to $25,060,000
and $62,458,000 for the same periods in 2002, representing a 27% increase for
the three-month period and a 40% increase for the nine-month period. The
increase in MVSD revenue was primarily due to a higher volume of systems sold
to customers in the semiconductor, electronics, and automotive industries.
SISD revenue for the three-month and nine-month periods ended September 28,
2003 totaled $6,827,000 and $20,525,000, respectively, compared to $6,767,000
and $17,820,000 for the same periods in 2002, representing a 1% increase for
the three-month period and a 15% increase for the nine-month period. The
increase in SISD revenue was due principally to a higher volume of SmartView®
systems sold to customers in the metals industry.

Gross Margin

Gross margin as a percentage of revenue was 66% for the three-month and
nine-month periods ended September 28, 2003, compared to 65% and 64% for the
same periods in 2002. The increase in gross margin was primarily due to the
impact of the higher sales volume, as well as a greater percentage of total
revenue from the sale of modular vision systems, which carry higher margins
than the sale of services and surface inspection systems. This increase was
partially offset by a lower amount of benefits recorded to Cost of product
revenue in 2003 from the sale of previously reserved inventory. These
benefits amounted to $296,000 and $1,174,000 for the three-month and nine-month
periods ended September 28, 2003, respectively, compared to $1,156,000 and
$2,156,000 for the same periods in 2002.

Product gross margin as a percentage of revenue remained consistent at 70% for
all periods presented, as the favorable impact of sales volume and revenue mix
was offset by the decreased benefit from the sale of previously reserved
inventory. Service gross margin as a percentage of revenue was 36% and 39% for
the three-month and nine-month periods ended September 28, 2003, respectively,
compared to 38% and 36% for the same periods in 2002. The decrease in service
margin for the three-month period was due principally to higher SISD service
costs required to support the growing installed base of surface inspection
systems. Although SISD service margins also declined for the nine-month
period, this was offset by higher MVSD service margins, resulting in higher
total service margins for the nine-month period. The increase in MVSD service
margin for the nine-month period was primarily due to higher maintenance and
support revenue.

MVSD gross margin as a percentage of revenue for the three-month and nine-month
periods ended September 28, 2003 was 71% and 70%, which was consistent with the
same periods in 2002. SISD gross margin as a percentage of revenue was 44% and
48% for the three-month and nine-month periods ended September 28, 2003,
respectively, compared to 45% and 44% for the same periods in 2002. The
decrease in SISD margin for the three-month period was primarily due to lower
service margins. The increase in SISD margin for the nine-month period was due
principally to the impact of the higher sales volume of surface inspection
systems.

Operating Expenses

Research, development, and engineering expenses (R,D,&E) for the three-month
and nine-month periods ended September 28, 2003 were $6,246,000 and
$18,492,000, respectively, compared to $6,714,000 and $19,564,000 for the same
periods in 2002, representing a 7% decrease for the three-month period and a 5%
decrease for the nine-month period. MVSD R,D&E expenses for the three-month
and nine-month periods ended September 28, 2003 decreased 10% and 8%,
respectively, from the same periods in 2002 primarily due to a workforce
reduction in the third quarter of 2002. SISD R,D&E expenses for the
three-month and nine-month periods ended September 28, 2003 increased 29% and
21%, respectively, from the same periods in 2002 principally due to an increase
in spending on software translation services and other activities related to
the SmartView® product line.

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Selling, general, and administrative (S,G&A) expenses for the three-month and
nine-month periods ended September 28, 2003 were $13,761,000 and $40,954,000,
respectively, compared to $15,551,000 and $42,973,000 for the same periods in
2002, representing a 12% decrease for the three-month period and a 5% decrease
for the nine-month period. MVSD S,G&A expenses for the three-month and
nine-month periods ended September 28, 2003 were relatively consistent with the
same periods in 2002, as savings from cost-cutting measures were offset by the
unfavorable impact of foreign exchange rate changes on the Companys
international operations. SISD S,G&A expenses were also relatively consistent
for the three-month period and were 11% higher for the nine-month period
principally due to higher spending in sales and marketing undertaken to
increase sales opportunities and grow market share. Corporate expenses that
are not allocated to a division decreased 49% for the three-month period and
40% for the nine-month period primarily due to lower legal costs associated
with patent infringement lawsuits initiated by the Company to protect its
intellectual property, as well as a $604,000 expense in the second quarter of
2002 related to the acquisition of the web inspection business of Honeywell
International Inc.

Foreign Currency Gain (Loss)

The Company recorded foreign currency gains of $828,000 for the three-month
period ended September 28, 2003, and losses of $963,000 for the nine-month
period ended September 28, 2003, compared to gains of $109,000 and $273,000 for
the same periods in 2002. The fluctuations in foreign currency gains and
losses were primarily due to the revaluation and settlement of accounts
receivable denominated in currencies other than the subsidiarys functional
currency.

Investment and Other Income (Loss)

Investment and other income for the three-month and nine-month periods ended
September 28, 2003 totaled $1,145,000 and $4,054,000, respectively, compared to
$2,626,000 and $1,224,000 for the same periods in 2002. In the second quarter
of 2002, the Company recorded $6,184,000 in losses from the sale of equity
securities. Excluding these losses, investment and other income was $7,408,000
for the nine-month period ended September 29, 2002. The decrease in investment
and other income was primarily due to lower average interest rates on the
Companys portfolio of debt securities, as well as gains on the sale of
investments recorded in the third quarter of 2002.

Income Taxes

The Companys effective tax rate for the three-month and nine-month periods
ended September 28, 2003 was a provision of 31% and 32%, respectively, compared
to 37% and a benefit of 33% for the same periods in 2002. The provision
reflects the Companys significant tax-exempt investment income and future
reductions in taxes payable relating to net operating loss carryforwards in
various jurisdictions, offset by continued investments in the Companys foreign
operations and losses related to an investment in a limited partnership, for
which no tax benefit was provided.

Liquidity and Capital Resources

At September 28, 2003, the Companys cash, cash equivalent, and investment
balances increased $22,386,000 to $298,371,000 from $275,985,000 at December
31, 2002. The Company has established guidelines relative to credit ratings,
diversification, and maturities of its investments to maintain liquidity. The
Companys cash requirements during the nine-month period ended September 28,
2003 were met with positive cash flow from operations, as well as the proceeds
from the issuance of stock under stock option, stock purchase, and other plans
and the maturity and sale of investments. Cash requirements consisted of
operating activities, capital expenditures, business acquisitions, payment of
dividends, and the purchase of investments. Capital expenditures during the
nine-month period ended September 28, 2003 totaled $1,570,000 and consisted
principally of expenditures for computer hardware and software.

On June 30, 2000, Cognex Corporation became a Limited Partner in Venrock
Associates III, L.P., a venture capital fund. The Company has committed to a
total investment in the limited partnership of up to $25,000,000, of which
$13,625,000 had been contributed as of September 28, 2003, including $3,250,000
during the nine-months ended September 28, 2003. The commitment to contribute
capital expires on January 1, 2005, and the Company does not have the right to
withdraw from the partnership prior to December 31, 2010.

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On December 12, 2000, the Companys Board of Directors authorized the
repurchase of up to $100,000,000 of the Companys common stock. During 2002, a
total of 1,768,452 shares were repurchased at a cost of $26,425,000. There
were no shares repurchased under this program prior to 2002 or during the
nine-month period ended September 28, 2003. The Company may repurchase
additional shares under this program in future periods depending upon a variety
of factors, including the market value of the Companys common stock and the
average return on the Companys invested balances.

On March 31, 2003, the Company acquired the wafer identification business of
Siemens Dematic AG for 7,000,000 Euros in cash (or $7,630,000), with the
potential for an additional cash payment in 2005 of up to 1,700,000 Euros (or
approximately $1,951,000 based upon the exchange rate at September 28, 2003)
depending upon the achievement of certain performance criteria. The March 31,
2003 cash payment of 7,000,000 Euros was based upon an estimated balance sheet
for the wafer identification business as of March 31, 2003. The Company is in
the process of reviewing the actual March 31, 2003 balance sheet and the cash
payment may be adjusted during the fourth quarter of 2003 based upon the
outcome of this review.

On August 5, 2003, the Companys Board of Directors declared a cash dividend of
$0.06 per share. The dividend was paid on September 19, 2003 to all
stockholders of record at the close of business on August 29, 2003. On October
24, 2003, the Companys Board of Directors declared a cash dividend of $0.06
per share. The dividend is payable on November 25, 2003 to all stockholders of
record at the close of business on November 10, 2003. Future dividends will be
declared at the discretion of the Board of Directors and will depend upon such
factors as the Board of Directors deems relevant. The Board of Directors may
modify the Companys dividend policy from time to time.

The Company believes that its existing cash, cash equivalents, and investments
balances will be sufficient to meet its planned operating, investing, and
financing activities in 2003, which consist primarily of working capital and
capital expenditure requirements, as well as any strategic initiatives in 2003,
including its stock repurchase program, dividend payouts, and potential
business or asset acquisitions.

New Pronouncements

In January 2003, the Financial Accounting Standards Board (FASB) issued
Interpretation No. 46, Consolidation of Variable Interest Entities, to expand
upon and strengthen existing accounting guidance that addresses when a company
should include in its financial statements the assets, liabilities, and
activities of another entity. Previously, a company generally has included
other entities in its consolidated financial statements only if it controlled
the entity through voting interests. Interpretation No. 46 changes that
guidance by requiring variable interest entities, as defined, to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entitys activities or is entitled to
receive a majority of the entitys residual returns. Interpretation No. 46
also requires disclosure about variable interest entities that a company is not
required to consolidate, but in which it has a significant variable interest.
On October 8, 2003, the FASB deferred the effective date of Interpretation No.
46 until periods ending after December 15, 2003. The Company does not believe
the adoption of Interpretation No. 46 will have a material impact on its
consolidated financial statements.




ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to the Companys exposures to market risk
since December 31, 2002.

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ITEM 4: CONTROLS AND PROCEDURES

As required by Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934,
the Company has evaluated, with the participation of management, including the
Chief Executive Officer and the Chief Financial Officer, the effectiveness of
its disclosure controls and procedures as of the end of the period covered by
this report. Based on such evaluation, the Chief Executive Officer and Chief
Financial Officer have concluded that such disclosure controls and procedures
are effective in ensuring that material information relating to the Company,
including its consolidated subsidiaries, is made known to the certifying
officers by others within the Company and its consolidated subsidiaries during
the period covered by this report. From time to time, the Company reviews the
disclosure controls and procedures, and may from time to time make changes
aimed at enhancing their effectiveness and to ensure that the Companys systems
evolve with its business. There was no change in the Companys internal
control over financial reporting that occurred during the quarter ended
September 28, 2003 that has materially affected, or is reasonably likely to
materially affect, the Companys internal control over financial reporting.

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PART II: OTHER INFORMATION



|        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ITEM 1. | LEGAL PROCEEDINGS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       
|        | To the Companys knowledge, there are no pending legal proceedings,
other than as described in the section captioned Intellectual
Property, appearing in Item I of the Companys Annual Report on
Form 10-K for the fiscal year ended December 31, 2002, which are
material to the Company. There have been no material developments
in such legal proceedings since December 31, 2002. In addition,
from time to time, the Company may be subject to various claims and
lawsuits by competitors, customers, or other parties arising in the
ordinary course of business, including lawsuits charging patent
infringement. There can be no assurance as to the outcome of any of
this litigation.

|        |                                                    
|------- | ---------------------------------------------------
|ITEM 2. | CHANGES IN SECURITIES AND USE OF PROCEEDS          
|       
|        | None                                               
|       
|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES                    
|       
|        | None                                               
|       
|ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
|       
|        | None                                               
|       
|ITEM 5. | OTHER INFORMATION                                  
|       
|        | None                                               
|       
|ITEM 6. | EXHIBITS AND REPORTS ON FORM 8-K                   

| |     |                                                                                                                                                                            
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | Exhibits                                                                                                                                                                   
|
| |     | 31.1  Certification of Chief Executive Officer pursuant to
Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of
1934                                             
|
| |     | 31.2  Certification of Chief Financial Officer pursuant to
Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of
1934                                             
|
| |     | 32.1  Certification of Chief Executive Officer pursuant to
18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002                           
|
| |     | 32.2  Certification of Chief Financial Officer pursuant to
18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002                           
|
| | (b) | Reports on Form 8-K                                                                                                                                                        
|
| |     | On July 23, 2003, the Company furnished a Current Report,
dated the same date, on Form 8-K regarding its earnings press
release for the fiscal quarter ended June 29, 2003.

19



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|      |  |                  |  |                                                                                                                                                                
|----- |  | ---------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|DATE: |  | November 4, 2003 |  | COGNEX CORPORATION                                                                                                                                             
|      |  |                  |  |                                                                                                                                                                
|      |  |                  |  | /s/ Robert J. Shillman                                                                                                                                         
|      |  |                  |  |                                                                                                                                                                
|      |  |                  |  | Robert J.
Shillman
President, Chief Executive Officer,
and Chairman of the Board of Directors
(duly authorized officer, principal executive officer)           
|      |  |                  |  |                                                                                                                                                                
|      |  |                  |  | /s/ Richard A. Morin                                                                                                                                           
|      |  |                  |  |                                                                                                                                                                
|      |  |                  |  | Richard A. Morin
Senior Vice President of Finance, Chief
Financial Officer, and Treasurer (duly
authorized officer, principal financial and accounting officer)

20