Press release

CyberOptics Reports First Quarter Results

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CyberOptics Corporation (Nasdaq: CYBE) today reported sales of $15.0
million for the first quarter of 2019 ended March 31, an increase of 6%
from $14.1 million in the first quarter of 2018. First quarter earnings
totaled $495,000 or $0.07 per diluted share, compared to the net loss of
$173,000 or $0.02 per share in last year’s first quarter.

Dr. Subodh Kulkarni, president and chief executive officer, commented:
“CyberOptics’ improved first quarter operating results were generated by
higher sales of 3D MRS-enabled SQ3000 automated optical inspection (AOI)
systems, MX600 sales and record quarterly sales of semiconductor
sensors, primarily consisting of our WaferSense family of products.”

He added: “We are confident that our family of 3D MRS-enabled sensors,
inspection and metrology systems are providing CyberOptics with a
significant competitive advantage and strong growth opportunities in our
targeted markets. This suite of technologically advanced products,
coupled with the steadily growing acceptance of our WaferSense family,
is forecasted to drive our sales growth and profitability in 2019 and

Sales of sensors, inspection and metrology systems based on 3D MRS
technology totaled $4.3 million in this year’s first quarter, virtually
unchanged from the year-earlier period due to the previously forecasted
softness in OEM sensor sales. These products plus our semiconductor
sensors accounted for 57% of total first quarter revenue, up from 53% in
last year’s first quarter.

Bucking the trend of weak SMT and semiconductor market conditions, sales
of inspection and metrology systems increased 20% year-over-year in the
first quarter of 2019 to $7.1 million. Within this category, first
quarter 2019 sales of 3D MRS-enabled SQ3000 AOI systems, including the
SQ3000 CMM that incorporates AOI with metrology functionality, grew 12%
year-over-year to $2.5 million. These advanced systems are now in use by
approximately 100 customers worldwide. CyberOptics had previously
forecasted $2.7 million of revenue from MX600 systems in the first
quarter of 2019, but ultimately only recognized $1.6 million of revenue
due to changes in the customer’s installation schedule for the systems.
Consistent with the customer’s current schedule, another $1.1 million of
MX600 sales are expected to be recognized in the second quarter of 2019,
with the remaining MX600 backlog of $550,000 slated for recognition in
the third quarter. Sales of inspection and metrology systems are
forecasted to grow strongly in the second quarter, paced by robust
demand for 3D SQ3000 products and the aforementioned MX600 sales.

As previously forecast, sales of 3D and 2D sensors declined 26%
year-over-year in the first quarter of 2019 to $3.7 million, with sales
of 3D MRS-enabled sensors down 18% year-over-year in the first quarter
to $1.7 million. Consistent with our prior statements, OEM customers for
3D and 2D sensors have continued to reduce orders due to sluggish
conditions in the global SMT and semiconductor markets. Weakness in 3D
and 2D sensor sales is expected to persist, resulting in a significant
year-over-year decline in sensor sales in the second quarter of 2019.
Sales of 3D and 2D sensors are expected to rebound during the second
half of 2019 as SMT and semiconductor markets begin to improve.

Sales of semiconductor sensors increased 31% year-over-year in the first
quarter of 2019 to a new quarterly record of $4.1 million, driven by
advanced Asian fabs commissioned in 2018 that have deployed WaferSense
sensors to improve yields. Sales of semiconductor sensors are forecasted
to be essentially flat on a year-over-year basis in the second quarter
of 2019 due to near-term softness in the semiconductor market.
CyberOptics believes its family of high-margin WaferSense products will
be one of CyberOptics’ growth and profitability drivers going forward.

Many potential customers, including OEMs and system integrators, are
evaluating CyberOptics’ MRS-enabled 3D sensors for semiconductor
back-end, mid-end and advanced packaging inspection and metrology
applications, given their high-resolution and inspection speeds two to
three times faster than competing sensors currently available in the
marketplace. Nominal sales are anticipated during the second half of
2019 due to the lengthy sales cycle for these sensors. However, sales
are expected to grow steadily in 2020 and beyond. CyberOptics believes
semiconductor back-end, mid-end and advanced packaging 3D inspection and
metrology represent important long-term growth opportunities.

CyberOptics ended the first quarter of 2019 with an order backlog of
$11.6 million, down from $13.6 million at the end of last year’s fourth
quarter. The company is forecasting sales of $15.0 to $16.5 million for
the second quarter of 2019 ending June 30. CyberOptics believes that
2019 will 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.

First Quarter Conference Call and Replay

CyberOptics will review its first quarter operating results in a
conference call at 4:30 PM Eastern today. Investors can access the live
call by dialing toll-free 855-719-5012 prior to the start of the call
and providing the conference ID: 6330365. 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 888-203-1112 and providing conference ID: 6330365. The replay
will be available for 30 days.

CyberOptics Corporation
Consolidated Statements of Operations (Unaudited)
(In thousands, except per share amounts)

Three Months Ended March 31,

      2019   2018
Revenue $14,976 $14,120
Cost of revenue     7,950   7,901  
Gross margin 7,026 6,219
Research and development expenses 2,293 2,180
Selling, general and administrative expenses     4,163   4,357  
Income (loss) from operations 570 (318 )
Interest income and other     59   62  
Income (loss) before income taxes 629 (256 )
Provision (benefit) for income taxes     134   (83 )
Net income (loss)     $495   ($173 )
Net income (loss) per share – Basic $0.07 ($0.02 )
Net income (loss) per share – Diluted     $0.07   ($0.02 )
Weighted average shares outstanding – Basic 7,100 6,986
Weighted average shares outstanding – Diluted     7,322   6,986  
Condensed Consolidated Balance Sheets (Unaudited)
      March 31, 2019   December 31, 2018
Cash and cash equivalents $9,315 $9,248
Marketable securities 7,684 5,771
Accounts receivable, net 13,037 15,859
Inventories 17,582 16,163
Other current assets     1,652   2,096  
Total current assets 49,270 49,137
Marketable securities 8,688 10,322
Intangible and other assets, net 1,690 1,699
Fixed assets, net 3,362 2,861
Right-to-use asset (operating leases) 2,338
Other assets 252 259
Deferred tax assets     5,332   5,422  
Total assets     $70,932   $69,700  
Liabilities and Stockholders’ Equity
Accounts payable $6,180 $8,513
Accrued expenses 3,486 4,204
Current lease liability (operating leases)     254    
Total current liabilities 9,920 12,717
Other liabilities 246 772
Long-term lease liability (operating leases)     3,591    
Total liabilities 13,757 13,489
Total stockholders’ equity     57,175   56,211  
Total liabilities and stockholders’ equity     $70,932   $69,700