CyberOptics Corp. Reports Operating Results (10-Q)
CyberOptics Corporation is a leading provider of sensors and inspection systems that provide process yield and through-put improvement solutions for the global electronic assembly and semiconductor capital equipment markets. The Company\'s products are deployed on production lines that manufacture surface mount technology circuit boards and semiconductor process equipment. By increasing productivity and product quality our sensors and inspection systems enable electronics manufacturers to strengthen their competitive positions in highly price-sensitive markets. Headquartered in Minneapolis Minnesota they conduct worldwide operations through facilities in North America Asia and Europe. CyberOptics Corp. has a market cap of $43.8 million; its shares were traded at around $6.46 with and P/S ratio of 1. Highlight of Business Operations: Our results were favorably impacted in 2006 and 2007 as the worldwide demand for cell phones, laptops and other consumer electronics remained strong, driving the need for increased production of printed circuit boards and memory modules, and thereby increasing demand for our electronic assembly and semiconductor products. After peaking in the third quarter of 2007, our revenue declined sequentially each quarter through the first quarter of 2009, as our results were negatively impacted by reduced levels of capital spending for electronics manufacturing capacity brought about by the deepening weakness in the global economy. New orders dropped off sharply late in the fourth quarter of 2008 as the global economy fell into a severe recession. Our results for the six months ended June 30, 2009 continued to be adversely affected by ongoing weakness in the global electronics market. Revenues were $5.2 million in the quarter ended June 30, 2009, down 61% from $13.4 million in the same period last year. We lost $4.0 million from operations in the quarter ended June 30, 2009, down from an operating loss of $733,000 in the quarter ended June 30, 2008.
For the quarter ending September 30, 2009 we are forecasting revenue of $6.5-$7.5 million, down from revenue of $11.6 million in the quarter ending September 30, 2008. Although we expect revenue for the third quarter of 2009 to be down when compared to last year, we are seeing early signs of strengthening in the global electronics market. Manufacturers of SMT assembly equipment, who did not place sensor orders in this years first half, have notified us they will resume ordering in the third quarter. In addition, demand for SE500 solder paste inspection and AOI systems from Asian original design manufacturers is improving, particularly those involved with producing SMT circuit boards for laptop computers. Reflecting these developments, we ended the second quarter with an order backlog of $6.4 million, of which $4.0 million is scheduled for shipment or customer acceptance in the third quarter ending September 30, 2009. This backlog is up 76% from the level at the end of this years first quarter.
Revenues from our electronic assembly OEM sensors decreased by 80% to $1.2 million in the three months ended June 30, 2009 from $5.9 million in the three months ended June 30, 2008 and decreased by 79% to $2.6 million in the six months ended June 30, 2009 from $12.8 million in the six months ended June 30, 2008. Revenues from our SMT systems products, decreased by 46% to $3.3 million in the three months ended June 30, 2009 from $6.1 million in the three months ended June 30, 2008 and decreased by 52% to $5.6 million in the six months ended June 30, 2009 from $11.7 million in the six months ended June 30, 2008.
Export revenue from electronic assembly sensors and SMT systems totaled $3.8 million or 85% of revenue in the three months ended June 30, 2009, compared to $10.6 million or 88% of revenue in the three months ended June 30, 2008. Export revenue from electronic assembly sensors and SMT systems totaled $6.7 million or 82% of revenue in the six months ended June 30, 2009, compared to $22.3 million or 91% of revenue in the six months ended June 30, 2008. Sales to international customers continue to be significant, as manufacturing of electronic components has migrated offshore, particularly to China and other areas of Asia.
Export revenue from semiconductor products totaled $120,000 or 18% of revenue in the three months ended June 30, 2009, compared to $604,000 or 45% of revenue in the three months ended June 30, 2008. Export revenue from semiconductor products totaled $328,000 or 25% of revenue in the six months ended June 30, 2009, compared to $1.2 million or 42% of revenue in the six months ended June 30, 2008.
In response to the significant weakness in our markets and the global economy, and also due to our transition of a significant portion of our operations to Singapore, we reduced our workforce by 50 employees or 25% (over 30 in manufacturing and approximately 20 in development, sales and marketing) from the start of the fourth quarter of 2008 through the end of the second quarter of 2009. Other cost saving measures include salary reductions of 12% for all officer and internal director level positions, 10% for other employees with salaries exceeding $100,000 and a smaller percentage reduction for employees with salaries ranging between $35,000 and $100,000. In addition, we have reduced spending for non-labor costs such as travel, supplies and the like. We anticipate that the workforce reductions, salary reductions and other cost saving measures, combined with savings from our transition to Singapore will provide aggregate annual expense savings of almost $5.0 million per year, of which approximately $3.0 million will be operating expense savings and $2.0 million will be the factory cost savings discussed above under gross margin.
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