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Acquisitions | 12 Months Ended
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Dec. 31, 2018
Business Combinations [Abstract] |
Acquisitions | Acquisitions The Company completed a total of six business acquisitions in 2017 and 2016. All of these transactions were accounted for as business combinations. Pro-forma information for these acquisitions is not presented because they are not significant, either individually or in the aggregate. Revenue and earnings since the dates of the acquisitions included in the Company's Consolidated Statements of Operations are also not presented because they are not material. Transaction costs were immaterial and were expensed as incurred. Assets acquired and liabilities assumed have been recorded at their estimated fair values as of the acquisition date. Contingent consideration is remeasured each reporting period with changes in fair value recorded in "Other income (expense)" on the Consolidated Statements of Operations. GVi Ventures, Inc. On April 12, 2017, the Company acquired selected assets and assumed selected liabilities of GVi Ventures, Inc., a privately-held maker of pre-configured vision solutions for common automotive applications based in the United States. The total purchase price of $5,368,000 included cash payment of $4,069,000 and contingent consideration valued at $1,299,000 as of the acquisition date. In addition, the Company entered into special incentive payments tied to employment, none of which are material, that are being recorded as compensation expense. In 2017, the Company recorded a $282,000 expense representing a fair value adjustment in other expense, which increased the liability amount to $1,581,000 as of December 31, 2017. In 2018, the Company paid $1,000,000 and recorded a $1,065,000 expense representing a fair value adjustment in other expense, which increased the liability amount to $1,646,000 as of December 31, 2018. The undiscounted potential outcomes related to future contingent consideration range from $0 to $2,500,000 based upon certain revenue levels over the next four years. Under this transaction, in addition to customer relationships and completed technologies, the Company acquired a team of software engineers that are expected to develop new products and increase the Company's ability to serve large customers in the automotive industry. The purchase price was allocated as follows (in thousands):
Accounts receivable | $ | 423 |
Inventories | 120 |
Prepaid expenses and other current assets | 1 |
Accounts payable | (152 | )
Accrued expenses | (10 | )
Completed technologies | 910 |
Customer relationships | 2,600 |
Goodwill | 1,476 |
Purchase price | $ | 5,368 |
The customer relationships and completed technologies are included in "Intangible assets" on the Consolidated Balance Sheet. The customer relationships are being amort ized to selling, general, and administrative e xpenses over eight years, and the completed technologies are being amortized to cost of revenue over five years, both on a straigh t-line basis. The portion of the acquired goodwill deductible for tax purposes is $443,000. ViDi Systems S.A. On April 4, 2017, the Company acquired all of the outstanding shares of ViDi Systems, S.A. (ViDi), a privately-held vision software company based in Switzerland. The total purchase price of $23,015,000 included cash payment of $20,019,000, with the remaining $2,996,000 recorded as a holdback to secure potential claims under the agreement that was paid in 2018. In addition, the Company entered into a special incentive payment tied to employment, which is not material, that is being recorded as compensation expense. Under this transaction, in addition to completed technologies, the Company acquired a team of software engineers that are expected to help the Company broaden the scope of applications that can be addressed with Cognex vision. ViDi's deep learning software solves complex applications that are too complicated and time-consuming to program and maintain with traditional machine vision rules-based algorithms. Using feedback, ViDi's software trains the system to distinguish between acceptable variations and defects. The purchase price was allocated as follows (in thousands):
Cash | $ | 146 |
Accounts receivable | 425 |
Prepaid expenses and other current assets | 129 |
Property, plant, and equipment | 40 |
Deferred income tax asset | 620 |
Accounts payable | (98 | )
Accrued expenses | (716 | )
Deferred income tax liability | (1,008 | )
Non-compete agreement | 370 |
Completed technologies | 4,774 |
Goodwill | 18,333 |
Purchase price | $ | 23,015 |
The non-compete agreement and completed technology are included in "Intangible assets" on the Consolidated Balance Sheet. The non-compete agreement will be amortized to research, development and engineering expenses over three years, and the completed technology will be amortized to cost of revenue over six years, both on a straight-line basis. The portion of the acquired goodwill deductible for tax purposes is $5,112,000. Webscan, Inc. On December 9, 2016, the Company acquired selected assets and assumed selected liabilities of Webscan, Inc., a privately-held U.S.-based ID provider of barcode verifiers. The total purchase price of $3,176,000 included $3,000,000 in cash paid upon closing and $176,000 in cash paid in January 2017 as a working capital adjustment. There are no contingent payments. In addition, the Company entered into special incentive payments tied to employment, none of which are material, that are being recorded as compensation expense. Under this transaction, in addition to customer relationships and completed technologies, the Company acquired a team of individuals including software engineers that are expected to help the Company accelerate the development of future ID products. The purchase price was allocated as follows (in thousands):
Accounts receivable | $ | 504 |
Inventories | 296 |
Prepaid expenses and other current assets | 8 |
Customer relationships | 680 |
Completed technologies | 840 |
Goodwill | 925 |
Accounts payable | (77 | )
Purchase price | $ | 3,176 |
The customer relationships and completed technologies are included in "Intangible assets" on the Consolidated Balance Sheet. The customer relationships are being amort ized to selling, general, and administrative e xpenses on a straigh t-line basis over seven years, and the completed technologies are being amortized to cost of revenue on a straigh t-line basis over five years. The portion of the acquired goodwill deductible for tax purposes is $287,000. Chiaro Technologies LLC On November 30, 2016, the Company acquired selected assets and assumed selected liabilities of Chiaro Technologies LLC, a privately-held U.S.-based 3D vision company. The total purchase price of $4,149,000 included cash payment of $3,538,000 and contingent consideration valued at $611,000 as of the acquisition date. In addition, the Company entered into special incentive payments tied to employment, none of which are material, that are being recorded as compensation expense. In 2017, the Company recorded a $15,000 expense representing a fair value adjustment in other expense, which increased the liability amount to $626,000 as of December 31, 2017. In 2018, the Company recorded a $282,000 expense representing a fair value adjustment in other expense, which increased the liability amount to $908,000 as of December 31, 2018. The undiscounted potential outcomes related to the contingent consideration range from $0 to $1,250,000 based upon certain milestone revenue levels to be met in 2019 and paid in early 2020. Under this transaction, in addition to completed technologies, the Company acquired a team of software engineers that are expected to help the Company accelerate the development of future 3D vision products. The purchase price was allocated as follows (in thousands):
Prepaid expenses and other current assets | $ | 3 |
Completed technologies | 1,350 |
Goodwill | 2,911 |
Accrued expenses | (115 | )
Purchase price | $ | 4,149 |
The completed technologies are included in "Intangible assets" on the Consolidated Balance Sheet and are being amortized to cost of revenue on a straigh t-line basis over seven years. The portion of the acquired goodwill deductible for tax purposes is $902,000. EnShape GmbH On October 27, 2016, the Company acquired all of the outstanding shares of EnShape GmbH, a privately-held 3D sensor provider based in Germany. The total purchase price of $7,901,000 included $5,395,000 in cash paid upon closing, $1,362,000 of contingent cash payments based upon the completion of certain tasks that was paid in 2017, and $1,144,000 of deferred cash payments as a holdback for potential indemnification claims that was paid in 2018. The Company also entered into special incentive payments tied to employment, none of which are material, that are being recorded as compensation expense. Under this transaction, in addition to customer relationships and completed technologies, the Company acquired a team of software engineers that are expected to help the Company accelerate the development of future 3D vision products. The purchase price was allocated as follows (in thousands):
Cash | $ | 167 |
Accounts receivable | 4 |
Inventories | 79 |
Prepaid expenses and other current assets | 1,896 |
Property, plant, and equipment | 44 |
Customer relationships | 447 |
Completed technologies | 1,089 |
Goodwill | 6,732 |
Accounts payable | (6 | )
Accrued expenses | (209 | )
Accrued income taxes | (2,342 | )
Purchase price | $ | 7,901 |
The customer relationships and completed technologies are included in "Intangible assets" on the Consolidated Balance Sheet. The customer relationships are being amort ized to selling, general, and administrative e xpenses, and the completed technologies are being amortized to cost of revenue, both on a straigh t-line basis over seven years. The portion of the acquired goodwill deductible for tax purposes is $328,000. AQSense, S.L. On August 30, 2016, the Company acquired selected assets and assumed selected liabilities of AQSense, S.L., a privately-held 3D vision software provider based in Spain. The total purchase price of $2,519,000 was paid in cash and there are no contingent payments. Under this transaction, in addition to customer relationships and completed technologies, the Company acquired a team of software engineers that are expected to help the Company accelerate the development of future 3D vision products. The purchase price was allocated as follows (in thousands):
Accounts receivable | $ | 168 |
Customer relationships | 598 |
Completed technologies | 384 |
Goodwill | 1,383 |
Accrued expenses | (14 | )
Purchase price | $ | 2,519 |
The completed technologies are included in "Intangible assets" on the Consolidated Balance Sheet and they are being amortized to cost of revenue on a straight-line basis over five years. The acquired goodwill is not deductible for tax purposes. In 2017, the Company determined that the carrying value of the customer relationships was impaired and reduced this value to zero. The impairment charge was included in selling, general, and administrative expenses on the Consolidated Statements of Operations.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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