CyberOptics Reports Second Quarter Sales and Earnings.MINNEAPOLIS -- CyberOptics Corporation (Nasdaq:CYBE) today reported consolidated revenues of $8,429,000 for the second quarter of 2005 ended June 30, down from $14,734,000 in last year's second quarter. Net income came to $202,000 or $0.02 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, compared to $3,522,000 or $0.39 per diluted share in the year-earlier period. Kathleen P. Iverson, president and chief executive officer, commented: "CyberOptics' second quarter operating results were consistent with our guidance for this period. Our ability to remain profitable amid current market conditions reflects the positive impact of the reduced cost structure implemented over the past few years that resulted in a significantly lower operating breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations point. Our streamlined expenses and cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. of more than $42 million at the end of the second quarter are enabling CyberOptics to operate effectively within a soft environment, while simultaneously maintaining important product development initiatives." Iverson added: "Consistent with prior statements, our revenues were affected by the release late in the second quarter of our new SE 300 Ultra 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 system. Reflecting positive initial acceptance of this high-speed system that also enables inspection of larger circuit boards, we anticipate increased 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 inspection systems sales in the third quarter. To date we have received SE 300 Ultra orders for approximately $750,000 for revenue in the third quarter. Second quarter revenues also were affected by the previously reported order slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. by one of 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 sensor A device that measures or detects a real-world condition, such as motion, heat or light and converts the condition into an analog or digital representation. An optical sensor detects the intensity or brightness of light, or the intensity of red, green and blue for color systems. customers due to a build-up build·up also build-up n. 1. The act or process of amassing or increasing: a military buildup; a buildup of tension during the strike. 2. in inventory during the market contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction that started late in 2004. This customer has worked through the majority of its inventory and has placed new orders for shipment in the third quarter. Reflecting both developments, CyberOptics' backlog rose to $4,848,000 at the end of the second quarter, from $3,535,000 at the end of the first quarter. These factors, combined with revenues from several new products, are expected to make the third quarter a better period for CyberOptics." Steven K. Case, Ph.D., chairman and founder, said, "Conditions in the global electronic assembly and semiconductor capital equipment markets have remained relatively soft thus far in 2005. Although we do not anticipate that market conditions will improve significantly during the third quarter, we believe several developments could result in a gradual upturn in our markets in future periods. The semiconductor inventory build-up that started in late 2004 largely has been worked down. Industry observers also report that capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. has stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. and could be showing early signs of some strengthening. Moreover, worldwide consumer demand for electronics remains strong. These factors make us hopeful that the current slowdown in the capital equipment markets we serve will not be as deep or prolonged pro·long tr.v. pro·longed, pro·long·ing, pro·longs 1. To lengthen in duration; protract. 2. To lengthen in extent. as the last 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. that affected our industry." Important New Products During the second quarter, CyberOptics made initial pre-production shipments of its new fiducial/inspection camera developed for DEK DEK - Data Encryption Key International's industry-leading line of SMT solder paste screen printers. Mounted inside the screen printer, these sensors
EPV Entry Point Vector EPV Equivalent Potential Vorticity EPV Ecrivain Public Virtuel (French) EPV Earnings Power Value EPV Endpoint Vector (TM) 5 (Embedded Inserted into. See embedded system. Process Verification) system for retrofitting the existing pick-and-place installations of a major manufacturer. Universal Instruments Corporation is continuing to integrate EPV inspection technology into its new-generation robotic ro·bot·ic adj. Relating to, characteristic of, or employing robots. assembly equipment. Sales of the first EPV-equipped Universal platforms are anticipated in late 2005 or early 2006. CyberOptics continued to carry a full valuation allowance on deferred tax assets during the first half of 2005, and recorded a tax provision at an estimated annual effective rate of 24%. CyberOptics will assess maintaining or eliminating its valuation allowance on deferred tax assets on a quarterly basis during 2005, and if reversed, a significant non-cash gain would be recorded. CyberOptics is also pleased to announce that Jeffrey A. Bertelsen has been named vice president and chief financial officer, replacing Scott G. Larson, who announced his resignation in April. Bertelsen formerly was vice president, finance and treasurer of Computer Network Technology Corporation, a leading provider of storage networking equipment and solutions for Fortune 1000 companies. Larson, who has remained with CyberOptics during the search for his successor, will continue in a part-time capacity through September to help ensure a smooth management transition. Financial Review --Second quarter sales of SMT component placement sensors to OEMs of robotic pick-and-place equipment were down 55% from the year-earlier period and by 28% from this year's first quarter. --Sales of SMT inspection systems, including both solder paste and automated optical inspection Automated Optical Inspection (AOI) is an automated visual inspection of PCB(or LCD,transistor manufacture) where a camera autonomously scans the device under test for both catastrophic failure (eg. missing component) and quality defects (eg. (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, declined 24% from the second quarter of 2004 and by 29% from this year's first quarter. This performance partly reflects the late second quarter release of the new SE 300 Ultra solder paste inspection system and the resulting inability to ship Ultra orders during this period. Ultra orders in the quarter-ended backlog are scheduled for shipment in the third quarter. Sales of AOI systems rose 361% from the year-earlier period and by 45% from this year's first quarter, reflecting growing market acceptance of this inspection technology among manufacturing outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. firms in Asia. --Sales of semiconductor products in this year's first quarter, including wafer-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, declined 30% in comparison to last year's second quarter and by 3% from this year's first quarter. --CyberOptics ended the second quarter of 2005 with cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has of $42,358,000, up from $40,284,000 at the end of 2004. Third Quarter Guidance For the third quarter of 2005 ending September 30, CyberOptics is forecasting earnings of $0.02 to $0.07 on revenues of $9.5 to $10.5 million. This earnings guidance reflects the impact of increased R&D expenditures, due to reduced levels of customer-funded product development and higher company-sponsored spending on new product initiatives. Gross margins are also expected to be somewhat lower due to a higher level of SMT systems revenue. About CyberOptics Founded in 1984, CyberOptics is a recognized leader in process yield and through-put improvement solutions for the global electronic assembly and semiconductor capital equipment markets. Headquartered in Minneapolis, Minnesota “Minneapolis” redirects here. For other uses, see Minneapolis (disambiguation). Minneapolis (pronounced IPA: /ˌmɪniˈæpəlɪs/) is the largest city in the U.S. , CyberOptics conducts operations in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , Asia and Europe. Statements regarding the Company's anticipated performance 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 customers; the availability of parts required for meeting customer orders; the timing and commercial success of new product introductions, including the new EPV initiative; 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 Second Quarter Conference Call and Replay CyberOptics will review its second quarter operating results in a conference call at 4:30 pm Eastern today. Investors can access a live webcast of the conference call by visiting the investor relations Investor relations The process by which the corporation communicates with its investors. section of the CyberOptics website, www.cyberoptics.com. The webcast will be archived for 30 days. A replay of the conference call can be heard through August 3, 2005 by dialing 303-590-3000 and providing the 11034979 confirmation code.
CyberOptics Corporation
Consolidated Statements of Operations (Unaudited)
(In thousands, except Three Months Ended Six Months Ended
per share amounts) June 30, June 30,
2005 2004 2005 2004
----------------------------------------------------------------------
Revenue $8,429 $14,734 $19,718 $27,424
Cost of revenue 3,558 5,786 8,468 11,066
----------------------------------------------------------------------
Gross margin 4,871 8,948 11,250 16,358
Research and
development expenses 1,678 1,939 3,387 3,701
Selling, general and
administrative
expenses 2,960 3,235 6,110 6,070
Restructuring and
serverance costs - 38 - 38
Amortization of
intangibles 207 227 414 457
----------------------------------------------------------------------
Income from
operations 26 3,509 1,339 6,092
Interest income and
other 246 38 403 166
----------------------------------------------------------------------
Income before income
taxes 272 3,547 1,742 6,258
Provision for income
taxes 70 25 420 50
----------------------------------------------------------------------
Net income $202 $3,522 $1,322 $6,208
======================================================================
Net income per share -
Basic $0.02 $0.41 $0.15 $0.73
Net income per share -
Diluted $0.02 $0.39 $0.15 $0.70
======================================================================
Weighted average
shares outstanding -
Basic 8,859 8,547 8,853 8,447
Weighted average
shares outstanding -
Diluted 8,980 9,063 8,988 8,924
======================================================================
Condensed Consolidated Balance Sheets
June 30, Dec. 31,
2005 2004
(Unaudited)
----------------------------------------------------------------------
Assets
Cash and cash
equivalents $23,335 $25,416
Marketable securities 11,766 5,537
Accounts receivable,
net 5,335 7,424
Inventories 7,630 7,178
Income tax receivable - -
Other current assets 513 511
----------------------------------------------------------------------
Total current assets 48,579 46,066
Marketable securities 7,257 9,331
Intangible and other
assets, net 8,011 8,706
Fixed assets, net 986 993
----------------------------------------------------------------------
Total assets $64,833 $65,096
======================================================================
Liabilities and Stockholders' Equity
Accounts payable $1,867 $1,543
Accrued expenses 3,774 5,602
----------------------------------------------------------------------
Total current
liabilities 5,641 7,145
----------------------------------------------------------------------
Total stockholders'
equity 59,192 57,951
----------------------------------------------------------------------
Total liabilities
and stockholders'
equity $64,833 $65,096
======================================================================
Backlog Schedule:
--------------------------------------------------------------------
3rd Quarter 2005 $4,784
4th Quarter 2005 and
thereafter 64
----------------------------------------------------------------------
Total backlog $4,848
======================================================================
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