10-Q 1 cgnx-20221002.htm 10-Q cgnx-20221002
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
FORM 10-Q 
(Mark One)
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended October 2, 2022 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 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)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.002 per shareCGNXThe NASDAQ Stock Market LLC

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   No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
 Yes   No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filer  Accelerated filer
Non-accelerated filer  Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    
 Yes   No  
As of October 2, 2022, there were 172,930,176 shares of Common Stock, $.002 par value per share, of the registrant outstanding.



INDEX
 
PART IFINANCIAL INFORMATION

2


PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS

COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
 Three-months EndedNine-months Ended
October 2, 2022October 3, 2021October 2, 2022October 3, 2021
 (unaudited)(unaudited)
Revenue$209,622 $284,848 $766,657 $793,033 
Cost of revenue57,383 85,712 214,316 208,189 
Gross margin152,239 199,136 552,341 584,844 
Research, development, and engineering expenses33,954 34,476 103,999 99,883 
Selling, general, and administrative expenses75,371 77,113 236,156 226,380 
Loss from fire (Note 17)2,891  20,294  
Operating income40,023 87,547 191,892 258,581 
Foreign currency gain (loss)(1,880)(586)(4,367)(2,233)
Investment income1,416 1,748 4,389 5,025 
Other income (expense)(214)(125)(450)(420)
Income before income tax expense39,345 88,584 191,464 260,953 
Income tax expense5,365 9,684 31,250 34,607 
Net income$33,980 $78,900 $160,214 $226,346 
Net income per weighted-average common and common-equivalent share:
Basic$0.20 $0.45 $0.92 $1.28 
Diluted$0.19 $0.44 $0.91 $1.26 
Weighted-average common and common-equivalent shares outstanding:
Basic173,256 176,812 173,640 176,572 
Diluted174,327 180,342 175,233 180,109 
Cash dividends per common share$0.065 $0.060 $0.195 $0.180 













 
The accompanying notes are an integral part of these consolidated financial statements.
3


COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
 
 Three-months EndedNine-months Ended
October 2, 2022October 3, 2021October 2, 2022October 3, 2021
 (unaudited)(unaudited)
Net income$33,980 $78,900 $160,214 $226,346 
Other comprehensive income (loss), net of tax:
Available-for-sale investments:
Net unrealized gain (loss), net of tax of $(1,564) and $(162) in the three-month periods, and net of tax of $(6,298) and $(808) in the nine-month
periods, respectively
(5,315)(521)(21,185)(2,617)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments into current operations79 (19)103 (87)
Net change related to available-for-sale investments(5,236)(540)(21,082)(2,704)
Foreign currency translation adjustments:
Foreign currency translation adjustments(7,352)(2,136)(13,425)(5,243)
Net change related to foreign currency translation adjustments(7,352)(2,136)(13,425)(5,243)
Other comprehensive income (loss), net of tax(12,588)(2,676)(34,507)(7,947)
Total comprehensive income$21,392 $76,224 $125,707 $218,399 


















The accompanying notes are an integral part of these consolidated financial statements.
4


COGNEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
 
October 2, 2022December 31, 2021
 (unaudited) 
ASSETS
Current assets:
Cash and cash equivalents$266,004 $186,161 
Current investments, amortized cost of $213,044 and $137,124 in 2022 and 2021, respectively, allowance for credit losses of $0 in 2022 and 2021
208,430 137,455 
Accounts receivable, allowance for credit losses of $741 and $776 in 2022 and 2021, respectively
96,292 130,348 
Unbilled revenue2,142 3,990 
Inventories108,553 113,102 
Prepaid expenses and other current assets106,046 68,742 
Total current assets787,467 639,798 
Non-current investments, amortized cost of $369,868 and $587,981 in 2022 and 2021, respectively, allowance for credit losses of $0 in 2022 and 2021
343,198 583,748 
Property, plant, and equipment, net79,425 77,546 
Operating lease assets31,514 23,157 
Goodwill237,509 241,713 
Intangible assets, net9,420 11,888 
Deferred income taxes405,136 418,570 
Other assets6,567 7,242 
Total assets$1,900,236 $2,003,662 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$22,220 $44,051 
Accrued expenses64,115 92,432 
Accrued income taxes12,055 8,577 
Deferred revenue and customer deposits54,777 35,743 
Operating lease liabilities8,111 7,786 
Total current liabilities161,278 188,589 
Non-current operating lease liabilities25,260 17,795 
Deferred income taxes259,950 293,769 
Reserve for income taxes12,204 14,780 
Non-current accrued income taxes33,008 43,160 
Other liabilities19,316 15,476 
Total liabilities511,016 573,569 
Commitments and contingencies (Note 10)
Shareholders’ equity:
Preferred stock, $.01 par value – Authorized: 400 shares in 2022 and 2021, respectively; no shares issued and outstanding
  
Common stock, $.002 par value – Authorized: 300,000 shares in 2022 and 2021, respectively; issued and outstanding: 172,930 and 175,481 shares in 2022 and 2021, respectively
346 351 
Additional paid-in capital960,446 914,802 
Retained earnings510,877 562,882 
Accumulated other comprehensive loss, net of tax(82,449)(47,942)
Total shareholders’ equity1,389,220 1,430,093 
Total liabilities and shareholders' equity$1,900,236 $2,003,662 

The accompanying notes are an integral part of these consolidated financial statements.
5


COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Nine-months Ended
October 2, 2022October 3, 2021
 (unaudited)
Cash flows from operating activities:
Net income$160,214 $226,346 
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense41,419 33,353 
Depreciation of property, plant, and equipment12,176 12,641 
Loss on disposal of property, plant, and equipment12 4 
Amortization of intangible assets2,468 2,773 
Excess and obsolete inventory charges2,728 2,120 
Non-cash impact of write-offs related to fire (Note 17)45,827  
Amortization of discounts or premiums on investments3,976 3,316 
Realized loss (gain) on sale of investments103 (87)
Change in deferred income taxes(14,799)1,411 
Change in operating assets and liabilities:
Accounts receivable31,018 (4,295)
Unbilled revenue1,760 (1,689)
Inventories(35,815)(22,534)
Prepaid expenses and other current assets(46,817)(24,607)
Accounts payable(21,577)10,576 
Accrued expenses(23,813)4,416 
Accrued income taxes(6,644)(4,936)
Deferred revenue and customer deposits20,882 16,751 
Other4,031 3,297 
Net cash provided by operating activities177,149 258,856 
Cash flows from investing activities:
Purchases of investments(77,760)(607,458)
Maturities and sales of investments215,876 317,174 
Purchases of property, plant, and equipment(15,605)(10,689)
Net cash provided by (used in) investing activities122,511 (300,973)
Cash flows from financing activities:
Net payments from issuance of common stock under stock plans4,225 59,101 
Repurchase of common stock(178,387)(48,294)
Payment of dividends(33,837)(31,800)
Net cash provided by (used in) financing activities(207,999)(20,993)
Effect of foreign exchange rate changes on cash and cash equivalents(11,818)(2,484)
Net change in cash and cash equivalents79,843 (65,594)
Cash and cash equivalents at beginning of period186,161 269,073 
Cash and cash equivalents at end of period$266,004 $203,479 











The accompanying notes are an integral part of these consolidated financial statements.
6


COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
 Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated
Other
Comprehensive
Loss
Total
Shareholders’
Equity
 SharesPar Value
Balance as of July 3, 2022173,397 $347 $947,269 $512,230 $(69,861)$1,389,985 
Net issuance of common stock under stock plans73  (189)— — (189)
Repurchase of common stock(540)(1)— (24,069)— (24,070)
Stock-based compensation expense— — 13,366 — — 13,366 
Payment of dividends ($0.065 per common share)
— — — (11,264)— (11,264)
Net income— — — 33,980 — 33,980 
Net unrealized gain (loss) on available-for-sale investments, net of tax of $(1,564)
— — — — (5,315)(5,315)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments— — — — 79 79 
Foreign currency translation adjustment— — — — (7,352)(7,352)
Balance as of October 2, 2022 (unaudited)172,930 $346 $960,446 $510,877 $(82,449)$1,389,220 
 Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated
Other
Comprehensive
Loss
Total
Shareholders’
Equity
 SharesPar Value
Balance as of July 4, 2021176,707 $353 $874,883 $593,290 $(39,072)$1,429,454 
Net issuance of common stock under stock plans415 1 14,693 — — 14,694 
Repurchase of common stock(323) — (27,417)— (27,417)
Stock-based compensation expense— — 10,614 — — 10,614 
Payment of dividends ($0.060 per common share)
— — — (10,608)— (10,608)
Net income— — — 78,900 — 78,900 
Net unrealized gain (loss) on available-for-sale investments, net of tax of $(162)
— — — — (521)(521)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments— — — — (19)(19)
Foreign currency translation adjustment— — — — (2,136)(2,136)
Balance as of October 3, 2021 (unaudited)176,799 $354 $900,190 $634,165 $(41,748)$1,492,961 






The accompanying notes are an integral part of these consolidated financial statements.
7


COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
 Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated
Other
Comprehensive
Loss
Total
Shareholders’
Equity
 SharesPar Value
Balance as of December 31, 2021175,481 $351 $914,802 $562,882 $(47,942)$1,430,093 
Net issuance of common stock under stock plans256  4,225 — — 4,225 
Repurchase of common stock(2,807)(5)— (178,382)— (178,387)
Stock-based compensation expense— — 41,419 — — 41,419 
Payment of dividends ($0.195 per common share)
— — — (33,837)— (33,837)
Net income— — — 160,214 — 160,214 
Net unrealized gain (loss) on available-for-sale investments, net of tax of $(6,298)
— — — — (21,185)(21,185)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments— — — — 103 103 
Foreign currency translation adjustment— — — — (13,425)(13,425)
Balance as of October 2, 2022 (unaudited)172,930 $346 $960,446 $510,877 $(82,449)$1,389,220 

 Common StockAdditional
Paid-in Capital
Retained EarningsAccumulated
Other
Comprehensive
Loss
Total
Shareholders’
Equity
 SharesPar Value
Balance as of December 31, 2020175,790 $352 $807,739 $487,912 $(33,801)$1,262,202 
Net issuance of common stock under stock plans1,590 3 59,098 — — 59,101 
Repurchase of common stock(581)(1)— (48,293)— (48,294)
Stock-based compensation expense— — 33,353 — — 33,353 
Payment of dividends ($0.180 per common share)
— — — (31,800)— (31,800)
Net income— — — 226,346 — 226,346 
Net unrealized gain (loss) on available-for-sale investments, net of tax of $(808)
— — — — (2,617)(2,617)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments— — — — (87)(87)
Foreign currency translation adjustment— — — — (5,243)(5,243)
Balance as of October 3, 2021 (unaudited)176,799 $354 $900,190 $634,165 $(41,748)$1,492,961 










The accompanying notes are an integral part of these consolidated financial statements.
8


COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 (GAAP). 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, 2021 for a full description of other significant accounting policies.
In the opinion of the management of Cognex Corporation (the "Company"), the accompanying consolidated unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments, adjustments related to the loss from fire (Note 17), and financial statement reclassifications necessary to present fairly the Company’s financial position as of October 2, 2022, and the results of its operations for the three-month and nine-month periods ended October 2, 2022 and October 3, 2021, and changes in shareholders’ equity, comprehensive income, 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 October 2, 2022 are not necessarily indicative of the results to be expected for the full year.
NOTE 2: New Pronouncements
Accounting Standards Update (ASU) 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting" and (ASU) 2021-01, "Reference Rate Reform (Topic 848): Scope"
The amendments in these ASUs apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Together, the ASUs provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in these ASUs are effective for all entities as of March 12, 2020 through December 31, 2022. Management does not expect ASU 2020-04 or ASU 2021-01 to have a material impact on the Company's consolidated financial statements and disclosures.
Accounting Standards Update (ASU) 2021-08, "Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers"
The amendments in this ASU primarily address the accounting for contract assets and contract liabilities related to revenue contracts with customers in a business combination. The ASU clarifies that an acquirer should account for the related revenue contracts in accordance with Accounting Standards Codification 606 as if the acquirer had originated the contracts. The amendments in this ASU are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, although early adoption is permitted. The amendments in the ASU should be applied prospectively to business combinations occurring on or after the effective date of the amendments. The expected financial statement impact of this new accounting standard cannot be reasonably estimated at this time, as the impact in future periods will depend on the contract assets and contract liabilities acquired in future business combinations. Management does not expect this ASU to have a material impact on the Company's disclosures.

9


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
The following table summarizes the financial assets and liabilities required to be measured at fair value on a recurring basis as of October 2, 2022 (in thousands):
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant Other
Observable
Inputs (Level 2)
Unobservable Inputs (Level 3)
Assets:
Money market instruments$504 $ $ 
Corporate bonds 455,220  
Asset-backed securities 56,508  
Treasury bills 21,591  
Agency bonds 15,759  
Sovereign bonds 1,930  
Municipal bonds 620  
Economic hedge forward contracts 835  
Liabilities:
Economic hedge forward contracts 442  
The Company’s money market instruments are reported at fair value based upon the daily market price for identical assets in active markets, and are therefore classified as Level 1.
The Company’s debt securities and forward contracts are reported at fair value based on model-driven valuations in which all significant inputs are observable or can be derived from or corroborated by observable market data for substantially the full term of the asset or liability, and are therefore classified as Level 2. Management is responsible for estimating the fair value of these financial assets and liabilities, and in doing so, considers valuations provided by a large, third-party pricing service. For debt securities, this service maintains regular contact with market makers, brokers, dealers, and analysts to gather information on market movement, direction, trends, and other specific data. They use this information to structure yield curves for various types of debt securities and arrive at the daily valuations. The Company's forward contracts are typically traded or executed in over-the-counter markets with a high degree of pricing transparency. The market participants are generally large commercial banks.
The fair value of the contingent consideration liability related to the Company's acquisition of GVi Ventures, Inc. in 2017 was written down to zero in 2019 resulting from a lower level of revenue in the Americas' automotive industry. The balance remained at zero through the remainder of the five-year assessment period which concluded during the second quarter of 2022.

Non-financial Assets that are Measured at Fair Value on a Non-recurring Basis
Non-financial assets, such as property, plant and equipment, operating lease assets, goodwill, and intangible assets, are required to be measured at fair value only when an impairment loss is recognized. The Company did not record impairment charges related to non-financial assets during the three-month or nine-month periods ended October 2, 2022 or October 3, 2021.
10


COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 4: Cash, Cash Equivalents, and Investments
Cash, cash equivalents, and investments consisted of the following (in thousands):
October 2, 2022December 31, 2021
Cash$265,500 $185,624 
Money market instruments504 537 
Cash and cash equivalents266,004 186,161 
Corporate bonds151,014 73,088 
Asset-backed securities28,119 37,655 
Agency bonds15,759 2,802 
Treasury bills12,918 18,912 
Municipal bonds620 4,998 
Current investments208,430 137,455 
Corporate bonds304,206 481,218 
Asset-backed securities28,389 43,940 
Treasury bills8,673 39,753 
Sovereign bonds1,930 2,119 
Agency bonds 16,077 
Municipal bonds 641 
Non-current investments343,198 583,748 
$817,632 $907,364 
Corporate bonds consist of debt securities issued by both domestic and foreign companies; asset-backed securities consist of debt securities collateralized by pools of receivables or loans with credit enhancement; agency bonds consist of domestic or foreign obligations of government agencies and government-sponsored enterprises that have government backing; treasury bills consist of debt securities issued by the U.S. government; municipal bonds consist of debt securities issued by state and local government entities; and sovereign bonds consist of direct debt issued by foreign governments. All of the Company's securities as of October 2, 2022 and December 31, 2021 were denominated in U.S. Dollars.
Accrued interest receivable is recorded in "Prepaid expenses and other current assets" on the Consolidated Balance Sheet and amounted to $3,011,000 and $3,037,000 as of October 2, 2022 and December 31, 2021, respectively.
11


COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the Company’s available-for-sale investments as of October 2, 2022 (in thousands):
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Current:
Corporate bonds$154,399 $ $(3,385)$151,014 
Asset-backed securities28,764  (645)28,119 
Agency bonds16,140  (381)15,759 
Treasury bills13,106 1 (189)12,918 
Municipal bonds635  (15)620 
Non-current:
Corporate bonds328,548  (24,342)304,206 
Asset-backed securities30,227  (1,838)28,389 
Treasury bills8,987  (314)8,673 
Sovereign bonds2,106  (176)1,930 
$582,912 $1 $(31,285)$551,628 
The following table summarizes the Company’s gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of October 2, 2022 (in thousands):
 Unrealized Loss Position For: 
 Less than 12 Months12 Months or GreaterTotal
 Fair ValueUnrealized
Losses
Fair ValueUnrealized
Losses
Fair ValueUnrealized
Losses
Corporate bonds$390,656 $(23,263)$64,564 $(4,464)$455,220 $(27,727)
Asset-backed securities56,125 (2,455)383 (28)56,508 (2,483)
Treasury bills19,427 (499)101 (4)19,528 (503)
Agency bonds15,759 (381)  15,759 (381)
Sovereign bonds1,930 (176)  1,930 (176)
Municipal bonds620 (15)  620 (15)
$484,517 $(26,789)$65,048 $(4,496)$549,565 $(31,285)
Management monitors debt securities that are in an unrealized loss position to determine whether a loss exists related to the credit quality of the issuer. When developing an estimate of expected credit losses, management considers all relevant information including historical experience, current conditions, and reasonable forecasts of expected future cash flows. Based on this evaluation, no allowance for credit losses on debt securities was recorded as of October 2, 2022 or December 31, 2021. There was no activity recorded in the allowance for credit losses during the three-month or nine-month periods ended October 2, 2022 or October 3, 2021.
The Company recorded no gross realized gains on the sale of debt securities for the three-month period ended October 2, 2022 and gross realized gains on the sale of debt securities totaling $133,000 for the nine-month period ended October 2, 2022, and gross realized losses on the sale of debt securities totaling $79,000 and $236,000 for the three-month and nine-month periods ended October 2, 2022, respectively. The Company recorded gross realized gains on the sale of debt securities totaling $19,000 and $87,000 for the three-month and nine-month periods ended October 3, 2021, respectively, and no gross realized losses on the sale of debt securities for the three-month and nine-month periods ended October 3, 2021. Realized gains and losses are included in "Investment income" on the Consolidated Statements of Operations. Prior to the sale of these securities, unrealized gains and losses for these debt securities, net of tax, were recorded in shareholders’ equity as accumulated other comprehensive loss.
12


COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table presents the effective maturity dates of the Company’s available-for-sale investments as of October 2, 2022 (in thousands):
<1 year1-2 Years2-3 Years3-4 Years4-5 YearsTotal
Corporate bonds$151,014 $157,264 $104,838 $42,104 $ $455,220 
Asset-backed securities28,119 16,384 3,202 8,803  56,508 
Treasury bills12,918 6,265 2,408   21,591 
Agency bonds15,759     15,759 
Sovereign bonds 970  960  1,930 
Municipal bonds620     620 
$208,430 $180,883 $110,448 $51,867 $ $551,628 

NOTE 5: Inventories
Inventories consisted of the following (in thousands):
October 2, 2022December 31, 2021
Raw materials$55,801 $50,452 
Work-in-process1,182 5,293 
Finished goods51,570 57,357 
$108,553 $113,102 
Refer to Note 17 for information regarding losses incurred from the fire at the Company's primary contract manufacturer's plant in Indonesia during the second quarter of 2022, including the impact on inventories.
NOTE 6: Leases
The Company's leases are primarily leased properties across different worldwide locations where the Company conducts its operations. All of these leases are classified as operating leases. Certain leases may contain options to extend or terminate the lease at the Company's sole discretion.
As of October 2, 2022, there were two options to terminate and six options to extend that were accounted for in the determination of the lease term for outstanding leases. Certain leases contain leasehold improvement incentives, retirement obligations, escalating clauses, rent holidays, and variable payments tied to a consumer price index. There were no restrictions or covenants for outstanding leases as of October 2, 2022.
The total operating lease expense for the three-month and nine-month periods ended October 2, 2022 were $2,255,000 and $6,699,000, respectively. The total operating lease cash payments for the three-month and nine-month periods ended October 2, 2022 were $2,161,000 and $6,467,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and nine-month periods ended October 2, 2022 was $35,000 and $110,000, respectively.
The total operating lease expense for the three-month and nine-month periods ended October 3, 2021 were $2,068,000 and $6,091,000, respectively. The total operating lease cash payments for the three-month and nine-month periods ended October 3, 2021 were $2,079,000 and $6,154,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and nine-month periods ended October 3, 2021 was $36,000 and $114,000, respectively.
13


COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Future operating lease cash payments are as follows (in thousands):
Year Ended December 31,Amount
Remainder of fiscal 2022$2,245 
20238,511 
20245,794 
20253,837 
20262,656 
20272,590 
Thereafter10,808 
$36,441