CyberOptics Reports Strong Fourth Quarter Operating Results

Fourth Quarter Sales of 3D MRS-Enabled Products Rose 61%

MINNEAPOLIS–(BUSINESS WIRE)–lt;a href=”” target=”_blank”gt;#CYBElt;/agt;–CyberOptics Corporation (Nasdaq: CYBE) today reported sales of $18.1
million for the fourth quarter of 2018 ended December 31, an increase of
37% from $13.2 million in the fourth quarter of 2017. Fourth quarter
earnings totaled $1.2 million or $0.16 per diluted share, up
substantially from $503,000 or $0.07 per diluted share in last year’s
fourth quarter.

For full-year 2018, sales totaled $64.7 million, an increase of 21% from
$53.3 million in 2017. Earnings in 2018 came to $2.8 million or $0.39
per diluted share, up from earnings of $1.3 million or $0.19 per diluted
share in 2017.

Dr. Subodh Kulkarni, president and chief executive officer, commented:
“CyberOptics’ improved fourth quarter operating results were driven in
part by significantly higher sales of 3D Multi-Reflection Suppression
(MRS)-enabled sensors and inspection/metrology systems. These
technologically advanced products are giving CyberOptics a true
competitive advantage in our targeted markets, and generated a
substantial portion of our fourth quarter and full-year sales growth.
Our fourth quarter revenues also benefited from customer acceptances for
$1.1 million of MX600 memory module inspection systems that were
previously expected to be recognized as revenue in the first quarter of
2019. And in an important milestone, in the fourth quarter of 2018 we
received our first purchase order for our 3D MRS-enabled sensor for
mid-end semiconductor inspection. We believe our suite of 3D MRS-enabled
products and family of WaferSense sensors for the semiconductor market
will drive CyberOptics’ continued growth and profitability in 2019 and

Sales of sensors and inspection/metrology systems based on 3D MRS
technology increased 61% year-over-year in the fourth quarter of 2018 to
$6.1 million, and increased by 47% on a year-over-year basis for all of
2018 to $21.1 million. Sales of 3D MRS based products and WaferSense
sensors accounted for slightly more than 50% of CyberOptics’ total sales
in the fourth quarter of 2018.

Sales of OEM sensors rose 66% year-over-year in the fourth quarter of
2018 to $5.8 million. This increase was paced by sales of 3D MRS-enabled
sensors, which grew 151% year-over-year to $2.3 million. OEM sensor
sales are forecasted to decline in the first quarter of 2019 on a
year-over-year basis, as customers have reduced orders due to sluggish
market conditions that emerged late in the fourth quarter of 2018.

Sales of inspection/metrology systems increased 46% year-over-year in
the fourth quarter of 2018 to $9.2 million. Within this category, sales
of 3D MRS-enabled SQ3000 automated optical inspection (AOI) systems,
including the new SQ3000™ 3D CMM that incorporates AOI with metrology
functionality, rose 40% year-over-year to $3.7 million. System revenues
in the fourth quarter benefited from customer acceptances for $1.1
million of MX600 memory module systems, and from $1.3 million of X-ray
system sales. CyberOptics expects to recognize revenue for approximately
$2.7 million of its MX600 backlog in the first quarter of 2019.

Sales of the WaferSense product line declined 9% year-over-year in the
fourth quarter of 2018 due to normal fluctuations in quarterly sales
flows and overall softness in the semiconductor capital equipment
market. Sales of these quality and productivity-enhancing tools are
forecasted to rebound in the first quarter of 2019, given strong order
activity early in the quarter. Additional WaferSense applications are
under development, and CyberOptics believes its family of high-margin
WaferSense products will figure prominently in the company’s growth and
profitability over the next few years.

Initial purchase orders have been received for MRS-enabled 3D sensors
and sub-systems for mid-end semiconductor inspection applications. Many
potential customers, including OEMs and system integrators, are actively
evaluating our 3D MRS sensor for semiconductor mid-end and advanced
packaging inspection, given its high-resolution with speeds two to three
times faster than competing sensors now on the market. Sales are
forecasted to grow gradually in 2019, with increasing momentum in 2020
and beyond. CyberOptics believes semiconductor mid-end and advanced
packaging inspection applications represent an important long-term
growth opportunity.

CyberOptics ended the fourth quarter of 2018 with an order backlog of
$13.6 million, down from $19.7 million at the end of the third quarter.
The current backlog, which includes orders of $3.3 million for MX600
systems, was affected by the sluggish market conditions that emerged
late in the fourth quarter of 2018. As a result, the company is
forecasting sales of $14.00 to $15.25 million for the first quarter of
2019 ending March 31. CyberOptics believes 2019 should be another year
of sales and earnings growth.

About CyberOptics
CyberOptics Corporation (
is a leading global developer and manufacturer of high-precision 3D
sensing technology solutions. CyberOptics’ sensors are used in SMT,
semiconductor and metrology markets to significantly improve yields and
productivity. By leveraging its leading edge technologies, the company
has strategically established itself as a global leader in high
precision 3D sensors, allowing CyberOptics to further increase its
penetration of key vertical markets. Headquartered in Minneapolis,
Minnesota, CyberOptics conducts worldwide operations through its
facilities in North America, 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 timing of orders and
shipments of our products, particularly our 3D MRS-enabled AOI systems;
increasing price competition and price pressure on our product sales,
particularly our SMT systems; the level of orders from our OEM
customers; the availability of parts required to meet customer orders;
unanticipated product development challenges; the effect of world events
on our sales, the majority of which are from foreign customers; rapid
changes in technology in the electronics and semiconductor markets;
product introductions and pricing by our competitors; the success of our
3D technology initiatives; the market acceptance of our SQ3000 3D CMM
system, products for semiconductor mid-end and advanced packaging
inspection applications and CyberGage360 product; costly and time
consuming litigation with third parties related to intellectual property
infringement; and other factors set forth in the company’s filings with
the Securities and Exchange Commission.

Fourth Quarter Conference Call and Replay

CyberOptics will review its fourth quarter operating results in a
conference call at 4:30 PM Eastern today. Investors can access the live
call by dialing toll-free 1-877-260-1479 prior to the start of the call
and providing the conference ID: 2197353. A webcast of the live
conference call, which will be archived for 30 days, can be heard by
visiting the investor relations section of the CyberOptics website,
A replay of the call, available one hour after the call, can be accessed
by dialing 1-888-203-1112 and providing conference ID: 2197353. The
replay will be available for 30 days.

CyberOptics Corporation
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts) Three Months Ended Dec 31, Twelve Months Ended Dec 31,
      2018     2017     2018     2017
Revenue $18,063 $13,176 $64,720 $53,333
Cost of revenue     10,371     7,139       36,109     28,573  
Gross margin 7,692 6,037 28,611 24,760
Research and development expenses 2,234 2,130 8,819 8,022
Selling, general and administrative expenses 3,976 3,836 16,389 15,657
Amortization of intangibles     9     16       44     66  
Income from operations 1,473 55 3,359 1,015
Interest income and other     28     34       220     (107 )
Income before income taxes 1,501 89 3,579 908
Provision (benefit) for income taxes     308     (414 )     752     (404 )
Net income     $1,193     $503       $2,827     $1,312  
Net income per share – Basic $0.17 $0.07 $0.40 $0.19
Net income per share – Diluted     $0.16     $0.07       $0.39     $0.19  
Weighted average shares outstanding – Basic 7,074 6,968 7,028 6,946
Weighted average shares outstanding – Diluted     7,303     7,176       7,208     7,075  
Condensed Consolidated Balance Sheets
December 31, 2018 Dec. 31, 2017
Cash and cash equivalents $9,248 $6,944
Marketable securities 5,771 6,670
Accounts receivable, net 15,859 10,772
Inventories 16,163 14,393
Other current assets                 2,096     1,593  
Total current assets 49,137 40,372
Marketable securities 10,322 9,073
Intangible and other assets, net 1,699 1,746
Fixed assets, net 2,861 2,307

Other assets



Deferred tax assets                


Total assets                 $69,700     $59,501  
Liabilities and Stockholders’ Equity
Accounts payable $8,513 $4,294
Accrued expenses                


Total current liabilities


Other liabilities                


Total liabilities 13,489 7,219
Total stockholders’ equity                 56,211     52,282  
Total liabilities and stockholders’ equity                 $69,700     $59,501  


Jeffrey A. Bertelsen, Chief Financial Officer

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