UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SD
Specialized Disclosure Report
COGNEX CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 001-34218 04-2713778
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification No.)
One Vision Drive, Natick, Massachusetts 01760-2059
(Address of principal executive offices) (Zip Code)
Dennis Fehr, Senior Vice President of Finance and Chief Financial Officer 508-650-3000
(Name and telephone number, including area code, of the person to contact in connection with this report.)
Check the appropriate box to indicate the rule pursuant to which this form is
being filed:
X Rule 13p-1 under the Securities Exchange Act (17 CFR 240.13p-1) for the reporting period from January 1 to December 31, 2023.
Rule 13q-1 under the Securities Exchange Act (17 CFR 240.13q-1) for the fiscal year ended December 31, 2023.
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COGNEX CORPORATION
SPECIALIZED DISCLOSURE REPORT ON FORM SD
FOR THE YEAR ENDED DECEMBER 31, 2023
INDEX
Section 1 - Conflict Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report 1
Item 1.02 Exhibit 1
Section 2 - Resource Extraction Issuer Disclosure
Item 2.01 Resource Extraction Issuer Disclosure and Report 1
Section 3 - Exhibits
Item 3.01 Exhibits 1
Exhibit 1.01 Conflict Minerals Report as required by Items 1.01 and 1.02 of this Form 1
Signatures 2
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COGNEX CORPORATION
SPECIALIZED DISCLOSURE REPORT ON FORM SD
FOR THE YEAR ENDED DECEMBER 31, 2023
Section 1 - Conflicts Minerals Disclosure
Item 1.01 Conflict Minerals Disclosure and Report
Conflict Minerals Disclosure
In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer
Protection Act ("Dodd-Frank") Section 1502 requiring the Securities and
Exchange Commission ("SEC") to issue a rule specifically relating to the use
of conflict minerals within manufactured products. Conflict minerals are
defined by the U.S. Law as columbite-tantalite (coltan), cassiterite, gold,
wolframite, or their derivatives, which are limited to tin, tantalum, and
tungsten (collectively known as the 3TGs). The SEC rule requires any SEC
registrant that manufactures, or contracts for the manufacture of, products
that contain 3TGs that are necessary to the functionality or production of
their products to determine whether the conflict minerals originated from the
Democratic Republic of the Congo ("DRC") and adjoining countries (collectively,
the DRC Region), and, if so, whether the purchase of those conflict minerals
directly or indirectly financed or benefited armed groups in the DRC Region.
By enacting this provision, Congress intends to further the humanitarian goal
of ending the violent conflict in the DRC Region, which has been partially
financed by the exploitation and trade of conflict minerals originating in
that area.
The Company has taken the actions described in its Conflict Minerals Report
("CMR") to comply with this SEC rule for the period ended December 31, 2023. A
copy of our CMR is included herewith as Exhibit 1.01 and is available on the
World Wide Web at www.cognex.com. The Report can be found on our website in
the "Company" section under the caption "Environment Policies."
Item 1.02 Exhibit
The Conflict Minerals Report required by Item 1.01 is filed as Exhibit 1.01 to
this Form SD.
Section 2 - Resource Extraction Issuer Disclosure
Item 2.01- Resource Extraction Issuer Disclosure and Report
Not applicable.
Section 3 - Exhibits
Item 3.01 Exhibits
Exhibit 1.01 - Conflict Minerals Report for the calendar year ended December
31, 202
3
1
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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 duly
authorized undersigned.
COGNEX CORPORATION Date
By: /s/ Dennis Fehr May 24, 2024
Dennis Fehr
Senior Vice President of Finance and Chief Financial Officer
2
EXHIBIT 1.01
COGNEX CORPORATION
CONFLICT MINERALS REPORT
FOR THE YEAR ENDED DECEMBER 31, 2023
Cognex Corporation (the "Company") is a leading global provider of machine
vision products and solutions that improve efficiency and quality in a wide
range of businesses across attractive industrial end markets. The Company
specializes in machine vision products that are used to automate the
manufacturing or distribution and tracking of discrete items, by locating,
identifying, inspecting, and measuring them. Cognex offers a full range of
machine vision systems and sensors, vision software, and industrial
image-based barcode readers designed to meet customer needs at different
performance and price points. Our products range from deep learning solutions
that solve complex applications with unpredictable defects and deviations, to
lower-cost vision sensors that conduct simple presence/absence inspections.
Our products have a variety of physical forms, depending on the user's needs.
For example, customers can purchase vision software to use with their own
camera and processor, or they can purchase a standalone unit that combines
camera, processor, and software into a single package. Our products may
contain any combination of lights, lenses, sensors, power supplies, cameras,
cables, circuit boards, software, brackets, frames, resistors, transistors, or
capacitors, among other things. Because of these components, our products do
contain conflict minerals, as defined below.
Most of Cognex's hardware products are manufactured utilizing third-party
contractors, whereby the majority of component procurement, system assembly,
and initial testing are performed by electronics manufacturing services
suppliers. With the acquisition of Moritex Corporation in the fourth quarter
of 2023, Cognex began in-house manufacturing of optical components, such as
lenses and lighting. Cognex's primary contract manufacturer is located in
Indonesia. Our contract manufacturers use specified components sourced from
vendor lists approved by Cognex and assembly/test processes created and
controlled by Cognex. After the completion of initial testing, assembled
products from our contract manufacturers are routed to our distribution
centers where trained Cognex personnel load Cognex software onto the products,
provide additional assembly and image alignment as needed, and perform quality
control procedures. Cognex ships finished products for customers located in
the Americas from our Southborough, Massachusetts distribution center, for
customers located in Europe from our Cork, Ireland distribution center, and
for customers located in Asia from our Singapore distribution center that
became operational during the fourth quarter of 2023.
In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank) Section 1502 requiring the Securities and Exchange
Commission ("SEC") to issue a rule specifically relating to the use of
conflict minerals within manufactured products. Conflict minerals are defined
by the U.S. Law as columbite-tantalite (coltan), cassiterite, gold,
wolframite, or their derivatives, which are limited to tin, tantalum, and
tungsten (collectively known as the 3TGs). The SEC rule requires any SEC
registrant that manufactures, or contracts for the manufacture of, products
that contain 3TGs that are necessary to the functionality or production of
their products to determine whether the conflict minerals originated from the
Democratic Republic of the Congo ("DRC") and adjoining countries (collectively,
the DRC Region), and, if so, whether the purchase of those conflict minerals
directly or indirectly financed or benefited armed groups in the DRC Region.
By enacting this provision, Congress intends to further the humanitarian goal
of ending the violent conflict in the DRC Region, which has been partially
financed by the exploitation and trade of conflict minerals originating in
that area. Under this rule, the Company must conduct a reasonable country of
origin inquiry ("RCOI") to determine if there is reason to believe that
conflict minerals necessary to the functionality or production of a product
manufactured or contracted to be manufactured by the Company may have
originated in the DRC Region, and whether those minerals may have come from
recycled or scrap sources. If, based upon the RCOI, the Company knows or has
reason to believe that any of the necessary 3TGs contained in its products
originated or may have originated in the DRC Region and knows or has reason to
believe that those 3TGs may not be solely from recycled or scrap sources, the
Company must conduct due diligence on the source and chain of custody of the
conflict minerals to determine if the necessary 3TGs contained in those
products did or did not originate from the DRC Region and, if so, whether they
directly or indirectly finance or benefit armed groups in the DRC Region. To
comply with this rule, the Company has undertaken a review of our products and
the inputs thereto. We have described that process below.
Due Diligence Performed
The Company's due diligence framework has been designed to conform in all
material respects to the
Organisation for Economic Co-operation and Development's Due Diligence
Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and
High-Risk Areas, including the Supplement on Tin, Tantalum and Tungsten and
the Supplement on Gold (Second Edition 2013)
(the "OECD guidance"). Summarized below are the components of our
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EXHIBIT 1.01
conflict minerals program as performed for the year ended December 31, 2023 as
they relate to the five-step framework set forth in the OECD guidance:
Establish Strong Company Management Systems:
In 2013, senior management, including Vice Presidents from the legal, finance,
and operations functions, developed the Company's Conflict Minerals Policy
(the "Policy"). This Policy is available on our corporate website and is
updated periodically. Currently, the Company's Quality Engineering group
within the operations function is responsible for complying with the Policy
and implementing the Company's conflict minerals program with input from
finance, legal, procurement, and senior management. This program involves
monitoring our RCOI and due diligence processes and responses thereto.
The Company expects all of its suppliers to have policies and procedures in
place to ensure that any 3TGs used in the production of the products sold to
Cognex are DRC conflict-free. This means that the products must not contain
3TGs that directly or indirectly finance or benefit armed groups in the DRC
region. We rely on our direct suppliers to provide information on the origin
of the 3TGs contained in components and materials supplied to us, including
sources of 3TGs that are supplied to them from lower tier suppliers.
The Company has established a process to develop transparency in the conflict
minerals supply chain that seeks to identify smelters utilized by our
suppliers, including collecting and retaining related information. To do this,
management thoughtfully and methodically reviewed our approved supplier list
to identify suppliers (and contract manufacturers over which we influence the
design of the product) who do or may supply us with product that contains
conflict minerals. Management then performed a RCOI with the assistance of a
third party. The third party was responsible for making the inquiries of our
suppliers, monitoring response rates, cataloging responses, and reviewing
responses for completeness.
Because the Company is not in a position to obtain mine of origin or transit
routes, or to carry out spot checks with respect to smelters with which we do
not have business relationships, the Company has requested, through our third
party service provider
,
that our preferred suppliers and contract manufacturers complete the
Responsible Minerals Initiative's ("RMI") Conflict Minerals Reporting Template
("CMRT") to identify the sources of their minerals and whether those minerals
are derived from recycled or scrap sources. When responding to this CMRT
template, the supplier must indicate the extent of their sourcing of these
minerals from conflict-affected and high-risk areas. The Company requires all
questions to be answered factually
,
which may require additional research to be performed by the supplier
.
This inquiry process has been designed to be completed annually with each
supplier. In addition, suppliers are expected to perform successive upstream
inquiries until a smelter is identified in order to complete the CMRT template.
The third party service provider compiles these results and submits monthly
reports to the Company. Management is responsible for reviewing these reports
for reasonableness and may seek additional information from a supplier that
did not respond or submits an incomplete response or a response that
management has reason to believe may be incorrect.
Violations of the Company's Conflict Minerals Policy can be reported via the
communication channels set out in the Cognex Corporation Code of Business
Conduct and Ethics which is located on our corporate website at the following
location: https://investor.cognex.com/esg/governance-documents/default.aspx.
The Company has adopted a policy to retain relevant documentation.
Identify and Assess Risks in the Supply Chain:
As noted above, the Company utilizes a third party to compile the results of
our RCOI. The responses to the CMRT template are reviewed periodically to
assess risk in our supply chain. Part of this assessment includes reviewing
responses to identify "red-flag" triggers. Additional due diligence procedures
would be carried out based upon specific facts and circumstances. Additional
due diligence measures may include:
.
Reviewing the Company's Supplier Code of Conduct with the supplier to
reinforce the Company's expectations regarding conflict minerals. This Code
requires suppliers to maintain sufficient knowledge of input materials and
components to ensure that they were obtained from permissible sources in
compliance with laws and regulations. This Supplier Code of Conduct is aligned
with Annex II of the OECD Due Diligence Guidance for Responsible Supply Chains;
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EXHIBIT 1.01
.
Following up via email or phone with suppliers who submit insufficient or
inconsistent responses or a response that management determined contained
errors or inaccuracies. Those suppliers were asked to provide clarification or
a revised response, as appropriate;
.
Reviewing the response provided to determine if the supplier identified any
smelters that are conformant; or
.
Reviewing the supplier's Conflict Minerals policy, if available.
Design & Implement a Strategy to Respond to Identified Risks
Management has developed a process to assess and respond to the risks
identified in our supply chain. In response to this risk assessment, Cognex
has a risk management plan, through which the conflict minerals program is
implemented, managed, and monitored. Management will carry out the due
diligence and RCOI procedures described above through direct contact by phone,
email, or other writing with our suppliers. As requested, we will provide a
copy of our Conflict Minerals Policy to suppliers and other users. If, after
multiple attempts, management cannot achieve satisfactory resolution after a
red-flag trigger is identified, results would be reviewed with senior
management and the supplier relationship would be evaluated. At that time, the
Company may consider evaluating the supplier's due diligence program.
We engage any of our suppliers whom we have reason to believe are supplying us
with 3TGs from sources that may support conflict in the DRC Region to
establish an alternative source of 3TGs that does not support such conflict,
as provided in the OECD Guidance.
Carry Out Independent Third-Party Audit of Due Diligence Practices
As we do not have a direct relationship with any 3TGs smelters or refiners and
do not perform or direct audits of these entities within our supply chain, we
rely upon programs such as the Conflict Free Smelter Program and other
recognized mechanisms to audit smelters' due diligence practices.
Further, our third party service provider directly contacts smelters and
refiners that are not currently enrolled in the Responsible Minerals Assurance
Process ("RMAP") to encourage their participation and gather information
regarding each facilities' sourcing practices on behalf of its compliance
partners. Cognex is a signatory of this communication in accordance with the
requirements of downstream companies detailed in the OECD Guidance.
Report Annually on Supply Chain Due Diligence
The Company reports periodically to senior management including Vice
Presidents from the legal, finance, and operations functions on our internal
due diligence efforts. In addition, our Conflict Minerals Policy and Conflict
Minerals Report contained in Form SD are posted on our corporate website at
the following location: https://www.cognex.com/company/environmental-policies.
The Form SD and Conflict Minerals Report are also publicly-available on the
SEC Edgar website.
Due Diligence Results
The Company's RCOI included inquiry of 538 in-scope manufacturers. At the time
of this filing, management has identified 61 countries of origin from which
398 smelters or refiners source conflict minerals based on responses received
during the RCOI process. 245 of those smelters are 'conformant' to RMAP (RMI's
audit program). 79 of the 91 suppliers who positively confirmed that they
source 3TGs from the DRC Region, noted that they had not yet completed mapping
their supply chain back to its source.
Information from our suppliers is still evolving and may contain company-level
declarations which may not be representative of materials we source from the
supplier that are contained in our products. Further, we have not received
responses from 100% of our suppliers. Therefore, at this time, management is
unable to ascertain the country of origin for all our products. It is the
desire of the Company to make responsible sourcing decisions for all of our
3TG products, including materials and components contained therein; however,
due to the complexity of our supply chain and the number of suppliers
involved, this is a process that will continue to evolve over time. Management
will continue its due diligence efforts to mitigate the risk that any conflict
minerals in its products might directly or indirectly benefit armed groups.
Pursuant to the April 29, 2014 "Statement on the Effect of the Recent Court of
Appeals Decision on the Conflict Minerals Rule" issued by Keith F. Higgins,
Director, SEC Division of Corporation Finance, the Company is not required to
describe its products as "DRC Conflict Free" or "DRC Conflict Undeterminable."
The Company is not required to obtain, and has not obtained, an independent
private sector audit of this Conflict Minerals Report.
As noted above, based upon responses from suppliers, the Company believes that
its products contain necessary
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EXHIBIT 1.01
3TGs that originate in the DRC Region and do not come from recycled or scrap
sources. At this time, the Company is not able to positively identify all
smelters, locations of those smelters, and the countries from which those
smelters derive 3TGs.
Below is an aggregated list of the 61 countries of origin from which the
reported facilities collectively source conflict minerals, based on
information provided by suppliers and the RMI. Many responses were provided at
the company-level, therefore, this list may contain more countries than those
that our products are being sourced from.
Andorra Ghana Netherlands Sweden
Australia Hong Kong New Zealand Switzerland
Austria India North Macedonia Taiwan
Belgium Indonesia Norway Thailand
Bolivia Italy Peru Turkey
Brazil Japan Philippines Uganda
Canada Kazakhstan Poland United Arab Emirates
Chile Korea Portugal United Kingdom
China Kyrgyzstan Russian Federation United States Of America
Colombia Lithuania Rwanda Uzbekistan
Czech Republic Macedonia Saudi Arabia Vietnam
Democratic Republic Of The Congo Malaysia Singapore Zambia
Estonia Mauritania Slovakia Zimbabwe
Ethiopia Mexico South Africa
France Mozambique Spain
Germany Myanmar Sudan
Future Due Diligence Measures
During the reporting period for the calendar year ending December 31, 2024,
the Company plans to take the following measures to further mitigate any risk
that the necessary 3TGs in our products could benefit armed groups in the DRC
or adjoining countries:
.
Continue to seek to increase the response rate from suppliers
.
Engage with our suppliers more closely and provide suppliers with more
information on responsible sourcing of 3TGs
.
Work diligently with our third party conflict minerals service provider to
obtain CMRTs on a product-specific basis, or other user-defined basis, to
enable us to determine which smelters and refiners actually process 3TGs
contained in our products
.
Encourage our suppliers to have due diligence procedures in place for their
supply chains to improve the content of the responses from such suppliers
.
Continue engagement with smelters by sending letters to those that have not
been audited as conformant
.
Work closely with our third party conflict minerals service provider to
identify smelters with legal affiliations to sanctioned entities, or smelters
located in a country that has been the subject of sanctions, that will pose
risk to the Company's responsible minerals program, and include these
identified smelters in future due diligence campaigns sent to suppliers
The Company anticipates that information on sourcing of conflict minerals and
traceability will continue to improve globally, and this will help the Company
to make increasingly informed supply chain decisions. The Company will
continually assess its due diligence measures used to determine whether
conflict minerals necessary to the functionality or production of the
Company's products originated in the DRC Region and, if so, whether they
directly or indirectly finance or benefit armed groups in the DRC Region.
Conclusion
The Company is committed to take reasonable action with respect to suppliers
who are not conformant and/or do not comply with our disclosure requests as
outlined in this report.