##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended April 4, 2010 or
 o
    
    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 001-34218
 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)
  þ o
  o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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##### 



INDEX
 PART I
    
    FINANCIAL INFORMATION
    
    
    3Item 1.
    
    Financial Statements (interim periods unaudited)
    
    
    3Consolidated Statements of Operations for the quarter ended April 4,
2010 and April 5, 2009
    
    
    3Consolidated Balance Sheets as of April 4, 2010 and December 31, 2009
    
    
    4Consolidated Statement of Shareholders Equity and Comprehensive
Income for the quarter ended April 4, 2010
    
    
    5Consolidated Condensed Statements of Cash Flows for the quarter
ended April 4, 2010 and April 5, 2009
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    20Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    27Item 4.
    
    Controls and Procedures
    
    
    27PART II
    
    OTHER INFORMATION
    
    
    28Item 1.
    
    Legal Proceedings
    
    
    28Item 1A.
    
    Risk Factors
    
    
    28Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28Item 3.
    
    Defaults Upon Senior Securities
    
    
    29Item 4.
    
    (Removed and Reserved)
    
    
    29Item 5.
    
    Other Information
    
    
    29Item 6.
    
    Exhibits
    
    
    29Signatures
    
    
    30EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



PART I: FINANCIAL INFORMATION
 
 ITEM 1: FINANCIAL STATEMENTS
 COGNEX CORPORATION
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
  Quarter EndedApril 4,
    
    
    April 5,2010
    
    
    2009(unaudited)RevenueProduct
    
    $
    54,613
    
    
    $
    38,128Service
    
    
    4,354
    
    
    
    4,15958,967
    
    
    
    42,287Cost of revenueProduct
    
    
    12,911
    
    
    
    10,386Service
    
    
    3,030
    
    
    
    3,07815,941
    
    
    
    13,464Gross marginProduct
    
    
    41,702
    
    
    
    27,742Service
    
    
    1,324
    
    
    
    1,08143,026
    
    
    
    28,823Research, development, and engineering expenses
    
    
    8,103
    
    
    
    8,835Selling, general, and administrative expenses
    
    
    23,622
    
    
    
    26,141Restructuring charges (Note 14)
    
    
    49
    
    
    
    297Operating income (loss)
    
    
    11,252
    
    
    
    (6,450
    )Foreign currency loss
    
    
    (165
    )
    
    
    (392
    )Investment income
    
    
    257
    
    
    
    884Other income (expense)
    
    
    (246
    )
    
    
    1,800Income (loss) before income tax expense (benefit)
    
    
    11,098
    
    
    
    (4,158
    )Income tax expense (benefit)
    
    
    2,553
    
    
    
    (748
    )Net income (loss)
    
    $
    8,545
    
    
    $
    (3,410
    )Earnings (loss) per weighted-average common and
common-equivalent share:Basic
    
    $
    0.22
    
    
    $
    (0.09
    )Diluted
    
    $
    0.22
    
    
    $
    (0.09
    )Weighted-average common and common-equivalent shares outstanding:Basic
    
    
    39,667
    
    
    
    39,655Diluted
    
    
    39,683
    
    
    
    39,655Cash dividends per common share
    
    $
    0.05
    
    
    $
    0.150
  3




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##### Table of Contents



COGNEX CORPORATION
CONSOLIDATED BALANCE SHEETS
 April 4,
    
    
    December 31,2010
    
    
    2009(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    114,664
    
    
    $
    119,831Short-term investments
    
    
    55,330
    
    
    
    55,563Accounts receivable, less reserves of
$1,402 and $1,358 in 2010 and 2009,
respectively
    
    
    33,722
    
    
    
    30,964Inventories
    
    
    17,877
    
    
    
    16,832Deferred income taxes
    
    
    7,728
    
    
    
    7,693Prepaid expenses and other current assets
    
    
    18,399
    
    
    
    18,471Total current assets
    
    
    247,720
    
    
    
    249,354Long-term investments
    
    
    33,107
    
    
    
    26,633Property, plant, and equipment, net
    
    
    28,290
    
    
    
    28,576Deferred income taxes
    
    
    15,169
    
    
    
    14,643Intangible assets, net
    
    
    27,037
    
    
    
    28,337Goodwill
    
    
    82,262
    
    
    
    82,604Other assets
    
    
    9,608
    
    
    
    9,722$
    443,193
    
    
    $
    439,869LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    6,812
    
    
    $
    4,959Accrued expenses
    
    
    18,002
    
    
    
    18,811Accrued income taxes
    
    
    2,626
    
    
    
    2Deferred revenue and customer deposits
    
    
    14,757
    
    
    
    14,908Total current liabilities
    
    
    42,197
    
    
    
    38,680Reserve for income taxes
    
    
    6,840
    
    
    
    6,741Commitments and contingencies (Note 8)Shareholders equity:Common stock, $.002 par value 
Authorized: 140,000 shares, issued: 39,672 and 39,665 shares in 2010 and
2009, respectively
    
    
    79
    
    
    
    79Additional paid-in capital
    
    
    69,321
    
    
    
    69,271Retained earnings
    
    
    335,021
    
    
    
    328,459Accumulated other comprehensive loss
    
    
    (10,265
    )
    
    
    (3,361
    )Total shareholders equity
    
    
    394,156
    
    
    
    394,448$
    443,193
    
    
    $
    439,869
  4




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COGNEX CORPORATION
 
 CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
 Accumulated OtherCommon Stock
    
    
    Additional Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Comprehensive
    
    
    Total ShareholdersShares
    
    
    Par Value
    
    
    Capital
    
    
    Earnings
    
    
    Loss
    
    
    Income
    
    
    EquityBalance as of December 31, 2009
    
    
    39,665
    
    
    $
    79
    
    
    $
    69,271
    
    
    $
    328,459
    
    
    $
    (3,361
    )
    
    
    
    
    
    $
    394,448Issuance of common stock under
stock option plans
    
    
    7
    
    
    
    
    
    
    
    120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120Stock-based compensation expense
(benefit)
    
    
    
    
    
    
    
    
    
    
    (33
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33
    )Excess tax expense from stock
option exercises
    
    
    
    
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37
    )Payment of dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,983
    )
    
    
    
    
    
    
    
    
    
    
    (1,983
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,545
    
    
    
    
    
    
    $
    8,545
    
    
    
    8,545Net unrealized loss on
available-for-sale investments,
net of tax of $53
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (90
    )
    
    
    (90
    )
    
    
    (90
    )Foreign currency translation
adjustment, net of tax benefit
of $222
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,814
    )
    
    
    (6,814
    )
    
    
    (6,814
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,641Balance as of April 4, 2010 (unaudited)
    
    
    39,672
    
    
    $
    79
    
    
    $
    69,321
    
    
    $
    335,021
    
    
    $
    (10,265
    )
    
    
    
    
    
    $
    394,156
  5




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COGNEX CORPORATION
 
 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
 Quarter EndedApril 4,
    
    
    April 5,2010
    
    
    2009(unaudited)Cash flows from operating activities:Net income (loss)
    
    $
    8,545
    
    
    $
    (3,410
    )Adjustments to reconcile net income (loss) to net
cash provided by operating activities:Stock-based compensation expense (benefit)
    
    
    (33
    )
    
    
    1,855Depreciation and amortization
    
    
    2,800
    
    
    
    2,931Intangible asset impairment charge (Note 6)
    
    
    
    
    
    
    1,000Provision for excess and obsolete inventory
    
    
    539
    
    
    
    1,057Tax effect of stock option exercises
    
    
    (37
    )
    
    
    87Deferred income tax
    
    
    (312
    )
    
    
    (2,046
    )Change in operating assets and liabilities
    
    
    (1,791
    )
    
    
    (956
    )Net cash provided by operating activities
    
    
    9,711
    
    
    
    518Cash flows from investing activities:Purchase of investments
    
    
    (16,694
    )
    
    
    (1,677
    )Maturity and sale of investments
    
    
    9,890
    
    
    
    11,170Purchase of property, plant, and equipment
    
    
    (1,081
    )
    
    
    (1,741
    )Cash received related to discontinued business
    
    
    315
    
    
    
    Net cash provided by (used in) investing activities
    
    
    (7,570
    )
    
    
    7,752Cash flows from financing activities:Issuance of common stock under stock option plans
    
    
    120
    
    
    
    Stock option buyback
    
    
    (83
    )
    
    
    Payment of dividends
    
    
    (1,983
    )
    
    
    (5,948
    )Tax effect of stock option exercises
    
    
    37
    
    
    
    (87
    )Net cash used in financing activities
    
    
    (1,909
    )
    
    
    (6,035
    )Effect of foreign exchange rate changes on cash
    
    
    (5,399
    )
    
    
    (6,353
    )Net decrease in cash and cash equivalents
    
    
    (5,167
    )
    
    
    (4,118
    )Cash and cash equivalents at beginning of period
    
    
    119,831
    
    
    
    127,138Cash and cash equivalents at end of period
    
    $
    114,664
    
    
    $
    123,020
  6




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COGNEX CORPORATION
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 1: Summary of Significant Accounting Policies
    NOTE 2: Revenue Recognition
    7




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COGNEX CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
     8




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COGNEX CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 3: Fair Value Measurements
 Financial Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
  Quoted Prices inActive Markets for
    
    
    Significant OtherIdentical Assets
    
    
    Observable Inputs(Level 1)
    
    
    (Level 2)Assets:Municipal bond investments
    
    
    
    
    
    $
    80,571Currency forward contracts
    
    $
    174
    
    
    
    $
    174
    
    
    $
    80,571Liabilities:Currency forward contracts
    
    $
    93$
    93
   Financial Assets that are Measured at Fair Value on a Non-recurring Basis
  Non-financial Assets that are Measured at Fair Value on a Non-recurring Basis
  9




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COGNEX CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 4: Cash, Cash Equivalents, and Investments
  April 4,
    
    
    December 31,2010
    
    
    2009Cash
    
    $
    114,664
    
    
    $
    119,831Cash equivalents
    
    
    
    
    
    
    Cash and cash equivalents
    
    $
    114,664
    
    
    $
    119,831Municipal bonds
    
    
    55,330
    
    
    
    55,563Short-term investments
    
    $
    55,330
    
    
    $
    55,563Municipal bonds
    
    
    25,241
    
    
    
    18,767Limited partnership interest (accounted for using cost method)
    
    
    7,866
    
    
    
    7,866Long-term investments
    
    $
    33,107
    
    
    $
    26,633$
    203,101
    
    
    $
    202,027
 NOTE 5: Inventories
  April 4,
    
    
    December 31,2010
    
    
    2009Raw materials
    
    $
    10,248
    
    
    $
    10,405Work-in-process
    
    
    1,302
    
    
    
    652Finished goods
    
    
    6,327
    
    
    
    5,775$
    17,877
    
    
    $
    16,832
 NOTE 6: Intangible Assets and Goodwill
   10




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COGNEX CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  NOTE 7: Warranty Obligations
   Balance as of December 31, 2009
    
    $
    1,377Provisions for warranties issued during the period
    
    
    646Fulfillment of warranty obligations
    
    
    (368
    )Foreign exchange rate changes
    
    
    (54
    )Balance as of April 4, 2010
    
    $
    1,601
 NOTE 8: Contingencies
     11




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COGNEX CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 9: Indemnification Provisions
    NOTE 10: Derivative Instruments
   
    
    transactional currency/functional currency exchange rate exposure from transactions that
are denominated in currencies other than the functional currency of the subsidiary (for
example, a Japanese Yen receivable on the Companys Irish subsidiarys books for which the
functional currency is the Euro), and
 
    
    functional currency/reporting currency exchange rate exposure from transactions that are
denominated in currencies other than the U.S. Dollar, which is the reporting currency of
the Company.
  12




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COGNEX CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
   Currency
    
    AmountJapanese Yen/Euro
    
    1,264,500,000 Japanese YenU.S. Dollar/Euro
    
    9,245,000 U.S. Dollars
  Asset Derivatives
    
    Liability DerivativesFair Value
    
    
    
    Fair ValueBalance Sheet
    
    
    
    
    
    
    
    
    
    Balance SheetLocation
    
    April 4, 2010
    
    December 31, 2009
    
    Location
    
    April 4, 2010
    
    December 31, 2009Currency 
forward contracts
    
    Prepaid expenses
and other current
assets
    
    $
    174
    
    
    $
    111
    
    
    Accrued
expenses
    
    $
    93
    
    
    $
    301
  Location of
    
    Amount of Loss Recognized inLoss Recognized in
    
    Income on DerivativeIncome on Derivative
    
    April 4, 2010
    
    April 5, 2009Currency
forward
contracts
    
    Foreign currency
loss
    
    $ (152)
    
    $ (176)
 NOTE 11: Stock-Based Compensation Expense
  13




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COGNEX CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  Weighted-AverageWeighted-
    
    
    RemainingAverage
    
    
    Contractual
    
    
    AggregateShares
    
    
    Exercise
    
    
    Term (in
    
    
    Intrinsic Value(in thousands)
    
    
    Price
    
    
    years)
    
    
    (in thousands)Outstanding as of December 31, 2009
    
    
    4,828
    
    
    $
    20.41Granted
    
    
    305
    
    
    
    19.12Exercised
    
    
    (7
    )
    
    
    17.53Forfeited or expired
    
    
    (115
    )
    
    
    19.74Outstanding as of April 4, 2010
    
    
    5,011
    
    
    $
    20.35
    
    
    
    5.9
    
    
    $
    1,289Exercisable as of April 4, 2010
    
    
    3,195
    
    
    $
    20.70
    
    
    
    4.7
    
    
    $
    1,085
  Risk-free rate
    
    
    3.7
    %Expected dividend yield
    
    
    1.0
    %Expected volatility
    
    
    43
    %Expected term (in years)
    
    
    5.3
 Risk-free rate
  Expected dividend yield
  Expected volatility
  Expected term
    14




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COGNEX CORPORATION  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    Quarter EndedApril 4, 2010
    
    
    April 5, 2009Product cost of revenue
    
    $
    58
    
    
    $
    189Service cost of revenue
    
    
    1
    
    
    
    82Research, development, and engineering
    
    
    251
    
    
    
    576Selling, general, and administrative
    
    
    (343
    )
    
    
    1,008$
    (33
    )
    
    $
    1,855
   NOTE 12: Stock Repurchase Program
  NOTE 13: Taxes
  Quarter EndedApril 4, 2010
    
    
    April 5, 2009Income tax (benefit) at federal statutory rate
    
    
    35
    %
    
    
    (35
    )%State income taxes, net of federal benefit
    
    
    1
    
    
    
    (1
    )Tax-exempt investment income
    
    
    
    
    
    
    (5
    )Foreign tax rate differential
    
    
    (13
    )
    
    
    21Other
    
    
    
    
    
    
    2Income tax provision (benefit)
    
    
    23
    %
    
    
    (18
    )%
 15




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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
      NOTE 14: Restructuring Charges
 November 2008
  April 2009
  16




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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 September 2009
   CumulativeAmount IncurredTotal Amount
    
    
    Incurred in the
    
    
    throughExpected to be
    
    
    Quarter Ended
    
    
    Quarter EndedIncurred
    
    
    April 4, 2010
    
    
    April 4, 2010One-time termination benefits
    
    $
    366
    
    
    $
    33
    
    
    $
    334Contract termination costs
    
    
    153
    
    
    
    
    
    
    
    153Other associated costs
    
    
    86
    
    
    
    20
    
    
    
    71$
    605
    
    
    $
    53
    
    
    $
    558
   One-time
    
    
    Contract
    
    
    OtherTermination
    
    
    Termination
    
    
    AssociatedBenefits
    
    
    Costs
    
    
    Costs
    
    
    TotalBalance as of December 31, 2009
    
    $
    113
    
    
    $
    153
    
    
    $
    
    
    
    $
    266Restructuring charges
    
    
    33
    
    
    
    
    
    
    
    20
    
    
    
    53Cash payments
    
    
    (116
    )
    
    
    (66
    )
    
    
    (20
    )
    
    
    (202
    )Balance as of April 4, 2010
    
    $
    30
    
    
    $
    87
    
    
    $
    
    
    
    $
    117
 17




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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 15: Weighted-Average Shares
  Quarter EndedApril 4,
    
    
    April 5,2010
    
    
    2009Basic weighted-average common shares outstanding
    
    
    39,667
    
    
    
    39,655Effect of dilutive stock options
    
    
    16
    
    
    
    Weighted-average common and common-equivalent shares outstanding
    
    
    39,683
    
    
    
    39,655
  NOTE 16: Segment Information
   Quarter
Ended
    
    
    
    
    
    
    
    
    
    ReconcilingApril 4, 2010
    
    MVSD
    
    SISD
    
    Items
    
    ConsolidatedProduct revenue
    
    $
    49,660
    
    
    $
    4,953
    
    
    
    
    
    
    $
    54,613Service revenue
    
    
    1,497
    
    
    
    2,857
    
    
    
    
    
    
    
    4,354Operating income (loss)
    
    
    15,445
    
    
    
    (328
    )
    
    $
    (3,865
    )
    
    
    11,252
 Quarter
Ended April 5, 2009Product revenue
    
    $
    33,757
    
    
    $
    4,371
    
    
    
    
    
    
    $
    38,128Service revenue
    
    
    1,520
    
    
    
    2,639
    
    
    
    
    
    
    
    4,159Operating loss
    
    
    (1,346
    )
    
    
    (474
    )
    
    $
    (4,630
    )
    
    
    (6,450
    )
  NOTE 17: Acquisition of Web Monitoring Business
  18




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COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    Weighted-AverageEstimated
    
    
    Amortization PeriodFair Value
    
    
    (in years)Inventories
    
    $
    259Intangible assetsCompleted technology
    
    
    670
    
    
    
    7Customer relationships
    
    
    1,950
    
    
    
    9Trademark
    
    
    140
    
    
    
    8Non-compete agreements
    
    
    230
    
    
    
    5Goodwill
    
    
    1,692Total assets acquired
    
    
    4,941Total liabilities assumed
    
    
    0Total purchase price
    
    $
    4,941
  NOTE 18: Dividends
  19




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ITEM 2: MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Forward-Looking Statements
  Executive Overview
   
    
    Discrete factory automation customers purchase Cognex vision products and incorporate
them into their manufacturing processes. Virtually every manufacturer can achieve better
quality and manufacturing efficiency by using machine vision, and therefore, this segment
includes a broad base of customers across a variety of industries, including automotive,
consumer electronics, food and beverage, health and beauty, medical devices, packaging, and
pharmaceutical. Sales to discrete factory automation customers represented approximately
71% of total revenue in the first quarter of 2010.
 20




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##### Table of Contents




    
    Semiconductor and electronics capital equipment manufacturers purchase Cognex vision
products and integrate them into the automation equipment that they manufacture and then
sell to their customers to either make semiconductor chips or assemble printed circuit
boards. Demand from these capital equipment manufacturers has historically been highly
cyclical, with periods of investment followed by downturn. This market has been in a
prolonged downturn since early 2006. Sales to semiconductor and electronics capital
equipment manufacturers represented approximately 16% of total revenue in the first quarter
of 2010.
    
    Surface inspection customers are manufacturers of materials processed in a continuous
fashion, such as metals, paper, non-wovens, plastics, and glass. These customers need
sophisticated machine vision to detect and classify defects on the surfaces of those
materials as they are being processed at high speeds. Surface inspection sales represented
approximately 13% of total revenue in the first quarter of 2010.
  Results of Operations
 Revenue
  Discrete Factory Automation
  Semiconductor and Electronics Capital Equipment
  21




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Surface Inspection
  Product Revenue
  Service Revenue
  Gross Margin
  MVSD Margin
  SISD Margin
  Product Margin
  22




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##### Table of Contents



Service Margin
  Operating Expenses
 Research, Development, and Engineering Expenses
    MVSD RD&E expenses in Q1 2009
    
    $
    8,015Headcount reductions
    
    
    (843
    )Stock-based compensation expense
    
    
    (310
    )Company bonus accruals
    
    
    334Other
    
    
    36MVSD RD&E expenses in Q1 2010
    
    $
    7,232
  Selling, General, and Administrative Expenses
   23




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MVSD SG&A expenses in Q1 2009
    
    $
    20,455Headcount reductions
    
    
    (1,817
    )Stock-based compensation expense
    
    
    (1,296
    )Intangible asset impairment and amortization
    
    
    (1,199
    )Sales commissions
    
    
    862Foreign currency exchange rate changes
    
    
    477Other
    
    
    (568
    )MVSD SG&A expenses in Q1 2010
    
    $
    16,914
   Restructuring Charges
 November 2008
  April 2009
  September 2009
   24




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##### Table of Contents



CumulativeAmount IncurredTotal Amount
    
    
    Incurred in the
    
    
    throughExpected to
    
    
    Quarter Ended
    
    
    Quarter Endedbe Incurred
    
    
    April 4, 2010
    
    
    April 4, 2010One-time termination benefits
    
    $
    366
    
    
    $
    33
    
    
    $
    334Contract termination costs
    
    
    153
    
    
    
    
    
    
    
    153Other associated costs
    
    
    86
    
    
    
    20
    
    
    
    71$
    605
    
    
    $
    53
    
    
    $
    558
   One-time
    
    
    Contract
    
    
    OtherTermination
    
    
    Termination
    
    
    AssociatedBenefits
    
    
    Costs
    
    
    Costs
    
    
    TotalBalance as of December 31, 2009
    
    $
    113
    
    
    $
    153
    
    
    $
    
    
    
    $
    266Restructuring charges
    
    
    33
    
    
    
    
    
    
    
    20
    
    
    
    53Cash payments
    
    
    (116
    )
    
    
    (66
    )
    
    
    (20
    )
    
    
    (202
    )Balance as of April 4, 2010
    
    $
    30
    
    
    $
    87
    
    
    $
    
    
    
    $
    117
 Nonoperating Income (Expense)
    25




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Income Tax Expense (Benefit)
  Liquidity and Capital Resources
        26




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Critical Accounting Policies and Estimates
 Revenue Recognition
  
 ITEM 3:
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 ITEM 4:
    
    CONTROLS AND PROCEDURES
  27




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##### Table of Contents



PART II: OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
 In May 2008, Microscan Systems, Inc. filed a complaint against the Company in
the United States District Court for the Western District of Washington alleging
infringement of U.S. Patent No. 6.105.869 owned by Microscan Systems, Inc. The
complaint alleges that certain of the Companys DataMan 100 and 700 series products
infringe the patent in question. In November 2008, the Company filed an answer and
counterclaim alleging that the Microscan patent was invalid and not infringed, and
asserting a claim for infringement of U.S. Patent No. 6.636.298. A trial date of
September 13, 2010 has been scheduled by the court.In May 2008, the Company filed a complaint against MvTec Software GmbH, MvTec LLC,
and Fuji America Corporation in the United States District Court for the District of
Massachusetts alleging infringement of certain patents owned by the Company. In
April 2009 and again in June 2009, Defendant MvTec Software GmbH filed
re-examination requests of the patents-at-issue with the United States Patent and
Trademark Office. This matter is ongoing.In May 2009, the Company pre-filed a complaint with the United States International
Trade Commission (ITC) pursuant to Section 337 of the Tariff Act of 1930, as
amended, 19 U.S.C. §1337, against MvTec Software GmbH, MvTec LLC, Fuji America, and
several other respondents alleging unfair methods of competition and unfair acts in
the unlawful importation into the United States, sale for importation, or sale
within the United States after importation. By this filing, the Company requested
the ITC to investigate the Companys contention that certain machine vision
software, machine vision systems, and products containing the same infringe, and
respondents directly infringe and/or actively induce and/or contribute to the
infringement in the United States, of one or more of the Companys U.S. patents. In
July 2009, the ITC issued an order that it would institute an investigation based
upon the Companys assertions. In September 2009, the Company reached a settlement
with two of the respondents, and in December 2009, the Company reached a settlement
with five additional respondents. In March 2010, the Company reached a settlement
with respondent Fuji Machine Manufacturing Co., Ltd. and its subsidiary Fuji America
Corporation. These settlements did not have a material impact on the Companys
financial results. This matter is ongoing and there is a hearing scheduled for May
2010.The Company cannot predict the outcome of the above-referenced matters and an
adverse resolution of these lawsuits could have a material adverse effect on the
Companys financial position, liquidity, results of operations, and/or
indemnification obligations. In addition, various other claims and legal
proceedings generally incidental to the normal course of business are pending or
threatened on behalf of or against the Company. While we cannot predict the outcome
of these incidental matters, we believe that any liability arising from them will
not have a material adverse effect on our financial position, liquidity, or results
of operations.
 
 ITEM 1A. RISK FACTORS
 For a complete list of factors that could affect the Companys business,
results of operations, and financial condition, see the risk factors discussion
provided in Part I  Item 1A of the Companys Annual Report on Form 10-K for the
fiscal year ended December 31, 2009.
 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 The following table sets forth information with respect to purchases by the
Company of shares of its Common Stock during the periods indicated.
 28




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##### Table of Contents



ApproximateTotal Number of
    
    
    Dollar Value ofShares
    
    
    Shares thatPurchased as
    
    
    May Yet BeTotal
    
    
    
    
    
    
    Part of Publicly
    
    
    PurchasedNumber of
    
    
    Average Price
    
    
    Announced
    
    
    Under theShares
    
    
    Paid
    
    
    Plans or
    
    
    Plans orPurchased
    
    
    per Share
    
    
    Programs (1)
    
    
    ProgramsJanuary 1  January 31, 2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    30,000,000February 1  February 28, 2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,000,000March 1 - April 4, 2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,000,000Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    30,000,000
 
 (1)
    
    In April 2008, the Companys Board of Directors authorized the repurchase of up
to $50,000,000 of the Companys common stock. 
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 None
 
 ITEM 4.(REMOVED AND RESERVED)
 
 ITEM 5. OTHER INFORMATION
 None
 
 ITEM 6. 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**
 
 *
    
    Filed herewith**
    
    Furnished herewith 29




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SIGNATURES
  DATE:  May 3, 2010
    COGNEX CORPORATIONBy:
    /s/ Robert J. ShillmanRobert J. ShillmanChief Executive Officer and Chairman of the Board
of Directors
(duly authorized officer, principal executive
officer)By:

/s/ Richard A. MorinRichard A. MorinExecutive Vice President of Finance, Chief
Financial Officer, and Treasurer
(duly authorized officer, principal financial and
accounting officer) 30