CyberOptics Reports Fourth Quarter, Full-Year 2002 Operating Results.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--Feb. 18, 2003 CyberOptics Corporation (Nasdaq:CYBE) today reported consolidated revenues of $6,714,000 for the fourth quarter of 2002 ended December December: see month. 31, an increase of 57% from $4,286,000 in the year-earlier period. The Company's net loss for this period came to $1,666,000 or $0.20 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, a significant improvement from the net loss of $3,173,000 or $0.39 per diluted share in the fourth quarter of 2001. For full-year 2002, consolidated revenues totaled $24,634,000, down from $38,446,000 in 2001. CyberOptics' net loss for 2002 came to $13,555,000 or $1.66 per diluted share. Excluding non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. for establishing valuation allowances on deferred tax assets and charges related to workforce reductions, CyberOptics' net loss in 2002 was $8,204,000 or $1.00 per diluted share. In 2001, the Company reported a net loss of $4,164,000 or $0.52 per diluted share. Excluding charges related to workforce reductions, the Company's net loss in 2001 was $3,913,000 or $0.49 per diluted share. Kathleen P. Iverson, president and chief executive officer, commented: "The recession in the global electronics capital equipment market continued unabated un·a·bat·ed adj. Sustaining an original intensity or maintaining full force with no decrease: an unabated windstorm; a battle fought with unabated violence. in 2002, which made the past year another challenging period for CyberOptics. We are pleased with the improved sales of electronic assembly sensors
Iverson continued: "We are generally encouraged by the performance of our inspection system products, which held up relatively well during the past year. The great majority of our inspection systems sales in 2002 were derived from Asian original design manufacturing services (ODMS ODMS Optimization Decision Management System ODMS Operational Data Management System ODMS Object Database Management System ODMS ODOCS Data Management Service ) and electronics manufacturing services Electronic manufacturing services (EMS) is term used for companies that design, test, manufacture, distribute and provide return/repair services for electronic component and assemblies for original equipment manufacturers (OEMs). (EMS) companies. We have booked business with seven of the 12 largest Asian ODMS companies, and repeat orders are now being generated by our growing installed base of solder paste Solder paste (or solder cream) is a mix of small solder particles and flux. It is used extensively in the automated soldering processes wave soldering and reflow soldering. inspection systems with these customers. Our Singapore sales office was instrumental in winning this new Asian business. To further capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the ongoing migration of electronics manufacturing This article presents a typical manufacturing process of an electronic assembly. Component manufacturing Components such as resistors, capacitors and integrated circuits are generally made by specialized contractors. to the Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. , we plan to open a sales office in the People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. of China later this year. We believe the Asian electronics manufacturing market will account for a steadily growing proportion of CyberOptics' inspection system business in coming years, and we are moving aggressively to garner our fair share of this business." Chairman Steven K. Case added: "Due to excess electronics manufacturing capacity, we believe demand for new production equipment, including our electronic assembly and semiconductor sensors, will likely remain sluggish for some time. However, we believe better near-term potential exists for our inspection systems, which can be retrofitted onto existing production lines to strengthen yields and through-put and thus provide electronics manufacturers with a competitive edge in price-sensitive markets. Consistent with this assessment, we plan to optimize optimize - optimisation this opportunity in 2003 by pursuing new initiatives in the inspection market." As recently reported, Case has resumed a full-time role at CyberOptics, following the decision not to pursue additional financing for Avanti Optics optics, scientific study of light. Physical optics is concerned with the genesis, nature, and properties of light; physiological optics with the part light plays in vision; and geometrical optics with the reflection and refraction of light as encountered in the study Corporation in view of depressed conditions in the global photonics photonics, the science and technology based on and concerned with the controlled flow of photons, or light particles. It is the optical equivalent of electronics, and the two technologies coexist in such innovations as optoelectronic integrated circuits. market. By year-end 2002, CyberOptics had written off substantially all of the $1.5 million term loan that it extended Avanti in the second quarter of 2002. This loan was secured by Avanti's intellectual property, which now belongs to CyberOptics. Sales of end-user inspection systems, including solder paste inspection and AOI AOI Area Of Interest AOI Automated Optical Inspection AOI Art of Illusion (3D modeling software) AOI Associated Oregon Industries AOI Angle Of Incidence AOI Age of Innocence (David Hamilton book, also a band) systems, increased 44% in this year's fourth quarter from the prior year's level but declined 9% for the year. Sales of electronic assembly sensors to OEMs of robotic ro·bot·ic adj. Relating to, characteristic of, or employing robots. assembly equipment increased 135% in the fourth quarter from the year-earlier level but were down 60% for the year. Sales of semiconductor products, principally wafer (1) A small, thin continuous-loop magnetic tape cartridge that has been used from time to time for data storage and specialized applications. (2) The base unit of chip making. It is a slice taken from a salami-like silicon crystal ingot up to 12" (300mm) in diameter. mapping sensors for OEMs of wafer-handling equipment and frame grabber A device that accepts standard TV signals and digitizes the current video frame into a single, bitmapped still image. Frame grabbers can be stand-alone devices that plug into a port on the computer or a function built into the video capture board or display adapter. products, were down 1% in the fourth quarter from the year-earlier level and 8% for the year. Due to workforce reductions and other cost control actions taken during the past year, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. declined 24% in the fourth quarter from the year-earlier level and by 17% for the year. Reflecting improvements in asset management and the Company's cost structure, cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments increased to $20,818,000 at year-end 2002 from $18,787,000 at the end of the third quarter. The Company's fourth quarter net loss was affected by a reduced income tax benefit, which resulted from the establishment of the valuation allowance on deferred taxes. Valuation allowances (non-cash accounting charges) were established against deferred tax assets during 2002 due to recent losses experienced during CyberOptics' cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. , resulting in an inability to carry these assets on the balance sheet under accounting guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. . When the Company returns to profitability and has achieved consistent earnings, the valuation allowance will be reassessed and could be eliminated, resulting in the recognition of the deferred tax assets and a significant income tax benefit at that time. The non-cash charges for establishing valuation allowances in 2002 includes $2,513,000 to reverse deferred tax assets as of December 31, 2001 and approximately $1,800,000 of deferred tax assets generated in 2002. Business Outlook In forecasting consolidated revenues of $5.8 to $6.5 million for the first quarter of 2003 ending March 31, CyberOptics said visibility into future orders remains limited because of the instability instability /in·sta·bil·i·ty/ (-stah-bil´i-te) lack of steadiness or stability. detrusor instability of global electronics markets. A net loss of $0.26 to $0.30 per diluted share is also forecasted for this period, which includes the impact of a charge of approximately $175,000 or $0.02 per share related to a further restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). earlier this quarter of the CyberOptics Semiconductor operation. The forecasted first quarter net loss also reflects the absence of an income tax benefit for this period. As previously reported, CyberOptics will not record an income tax benefit on losses or tax expense on earnings until the valuation allowance on deferred taxes is eliminated. Based on forecasted levels of revenue, the Company would anticipate using a moderate amount of cash in the first quarter of 2003. About CyberOptics CyberOptics Corporation, a recognized worldwide leader in optical technology, designs and manufactures a growing range of yield and through-put enhancement tools for the SMT (1) (Surface Mount Technology) See surface mount. (2) (Station ManagemenT) An FDDI network management protocol that provides direct management. Only one node requires the software. SMT - Station Management electronic assembly equipment and semiconductor fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. equipment markets. Statements regarding the Company's anticipated performance in 2003 are forward-looking and therefore involve risks and uncertainties, including but not limited to: market conditions in the global SMT and semiconductor capital equipment industries, the level of orders from our OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and customers, the timing and commercial success of new product introductions, the effect of world events on our sales, the majority of which are from foreign customers, product introductions and pricing by our competitors, and other factors set forth in the Company's filings with the Securities and Exchange Commission Fourth Quarter Conference Call and Replay The Company will review its fourth quarter operating results in a conference call at 4:30 pm Eastern today. Investors can listen to this conference call at www.cyberoptics.com or www.vcall.com. Listeners should go to one of these web sites at least 15 minutes before the scheduled start time to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. The conference call will be archived for 30 days on the Vcall site. A replay of the conference call will be available through February 25 at 719-457-0820 and providing the 436615 confirmation code.
CyberOptics Corporation
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share Three Months Twelve Months
amounts) Ended Dec. 31, Ended Dec. 31,
2002 2001 2002 2001
----------------------------------------------------------------------
Revenue $6,714 $4,286 $24,634 $38,446
Cost of revenue 3,707 2,931 14,575 18,722
----------------------------------------------------------------------
Gross margin 3,007 1,355 10,059 19,724
Research and development
expenses 1,714 2,091 8,014 8,564
Selling, general and
administrative expenses 2,891 3,975 13,183 16,927
Restructuring and severance
costs - - 1,647 419
Amortization of goodwill and
other intangibles 280 649 1,123 2,408
----------------------------------------------------------------------
Income (loss) from
operations (1,878) (5,360) (13,908) (8,594)
Interest income and other (163) 252 (671) 1,355
----------------------------------------------------------------------
Income (loss)
before income
taxes (2,041) (5,108) (14,579) (7,239)
Provision (benefit) for income
taxes (375) (1,935) (1,024) (3,075)
----------------------------------------------------------------------
Net income (loss) ($1,666) ($3,173) ($13,555) ($4,164)
======================================================================
Net income (loss) per share -
Basic ($0.20) ($0.39) ($1.66) ($0.52)
Net income (loss) per share -
Diluted ($0.20) ($0.39) ($1.66) ($0.52)
======================================================================
Weighted average shares
outstanding - Basic 8,206 8,095 8,168 8,026
Weighted average shares
outstanding - Diluted 8,206 8,095 8,168 8,026
======================================================================
Condensed Consolidated Balance Sheets
Dec. 31, Dec. 31,
2002 2001
(Unaudited)
----------------------------------------------------------------------
Assets
Cash and cash equivalents $11,009 $12,323
Marketable securities 4,086 8,407
Accounts receivable, net 3,836 2,740
Inventories 7,065 9,667
Income tax receivable 2,354 2,076
Other current assets 577 738
Deferred tax assets - 1,684
----------------------------------------------------------------------
Total current
assets 28,927 37,635
Marketable securities 5,723 7,830
Intangible and other assets,
net 10,923 11,512
Fixed assets, net and other 2,354 3,375
Deferred tax assets - 829
----------------------------------------------------------------------
Total assets $47,927 $61,181
======================================================================
Liabilities and Stockholders'
Equity
Accounts payable $1,251 $1,787
Accrued expenses 2,614 2,356
----------------------------------------------------------------------
Total current
liabilities 3,865 4,143
----------------------------------------------------------------------
Total stockholders' equity 44,062 57,038
----------------------------------------------------------------------
Total liabilities
and stockholders'
equity $47,927 $61,181
======================================================================
Backlog Shipment Schedule:
--------------------------------------------------
1st Quarter 2003 $2,423
2nd Quarter 2003
and thereafter 381
-------------------------------------------------------------
Total backlog $2,804
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