Vision dimmed by recession

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Virtually alone among vision companies, Flir Systems, the thermal imaging specialist, has reported an increase in its revenues and profits for the second quarter of 2009 compared to the same period in the previous year. Its Government Systems Division reported increased revenues of 22 per cent over the second quarter of 2008, while commercial vision systems increased by only 4 per cent and revenue from the Thermography Division declined 17 per cent.

Elsewhere, though, the picture is much gloomier, with the VDMA (the German Engineering Federation) estimating a 30 per cent decrease in revenues for the German machine vision industry this year compared to 2008, according to Dr Dietmar Ley, chairman of the VDMA's Machine Vision Group. 'After 10 years of continued growth in sales, the industry would therefore decline to the level of 2003,' he said.

Taking the pulse of the machine vision industry is difficult, as many companies are owned either by their founders or have venture capital funding and so do not need to report results publicly to stock market investors every quarter. With the exception of Flir Systems however, those companies that have published interim results have reported sharp declines in revenue as a result of the recession.

But executives do see some signs that the worst might be over. Although Cognex experienced a 39 per cent decline in revenue compared to the second quarter of 2008 and has seen, over the first six months of this year, a loss of nearly $10m compared to a profit of $17m in the first half of 2008, the company increased its ordinary revenue by about 8 per cent compared to the first quarter of 2009, leading Dr Robert Shillman, Chairman and CEO of Cognex to say: 'After a sharp slowdown in customer demand during the prior three quarters, we saw the order rate appear to stabilise in May.' (Cognex's results were distorted because $4.4m in revenue from a single contract had been allocated to the first quarter of 2009, even though the goods had been shipped over the previous two years. The 8 per cent increase in revenue excludes that single item.)

Brian Doody, Chief Executive Officer of Dalsa, also saw reason for optimism: 'In the second quarter we saw some stabilisation in our business as well as several indications of a recovery in our markets beginning in the fourth quarter this year. In our digital imaging business, in particular, we noted an improvement in sentiment among OEMs in the key Asia/Pacific region.' Dalsa's revenues showed a 24 per cent decline from the same quarter of 2008. However, in addition to its imaging products, Dalsa also provides semiconductor products and services – specialised integrated circuit and electronics technology, software, and highly engineered semiconductor wafer processing. Its semiconductor operations showed much less of a decline than the digital imaging side of the business.

Nortech Systems reported a 38 per cent decline in net sales for the second quarter of 2009 compared to the second quarter of 2008. Through Intercon-1, it makes cabling for machine vision systems, although that is only part of its business. The company is a full-service electronics manufacturing services (EMS) provider of wire and cable assemblies, printed circuit board assemblies, and higher-level complete box build assemblies for a wide range of industries.

Basler showed a decline of 46 per cent in its revenues compared to the second quarter of last year. The biggest decline (66 per cent) was on the complete vision solutions side of the company's business, due mainly to the fact that the LCD industry has undertaken no investment for expansion since May 2008, expansion of the solar panel industry has slowed too, and demand for 3rd generation optical media (BluRay discs) has proved lower than expected by the film studios. The cameras and components side of the business also experienced a decline but not on the same scale and Dr Ley, Basler's CEO, said: 'We expect better days ahead for the components business. We also expect to be able to realise growth again in incoming orders and sales in the second half of the year.'