Consolidated sales totaled $6,684,000, down from $11,570,000 in 2008 third quarter and $14,888,000 in the fourth quarter of 2007.
The company’ net loss came to $6,057,000 or $0.90 per diluted share, which included a pre-tax non-cash goodwill impairment charge of $3,941,000 ($0.53 per share after-tax), triggered by the decline in the company’ market capitalization. The fourth quarter net loss also included pre-tax charges of $650,000 or $.06 per share after tax for excess and obsolete inventory and $294,000 or $.03 per share after tax for severance. CyberOptics’ net loss in this year’s third quarter was $772,000 or $0.11 per diluted share, which included about $650,000 of pre-tax expense, related to the previously announced transition of inspection systems-related R&D and manufacturing to Singapore and a $257,000 income tax benefit from an expiring statute of limitations for certain tax exposures. The company reported net income of $1,204,000 or $0.13 per diluted share in the fourth quarter of 2007.
The company ended the fourth quarter of 2008 with cash and marketable securities of $29,783,000, compared to $29,228,000 at the end of the third quarter and $52,618,000 at the beginning of 2008. During 2008, the company utilized cash of $20,949,000 to repurchase about 2.1 million common shares. No share repurchase authorizations are currently in effect. Cash reserves at the end of the fourth quarter are more than adequate for funding the company’s operations and various growth opportunities.
The company’s net loss for the year-end 2008 included the previously mentioned non-cash goodwill impairment and other charges.
Kathleen P. Iverson, president and chief executive officer, commented: “Our fourth quarter operating results reflect the severity of the global economic downturn and its impact on the electronics industry. As reported in our January pre-release, sales of both electronic assembly sensors and inspection systems were below forecasted levels in the fourth quarter. Revenues for this period also were affected by a delay in customer acceptance of a previously shipped order for 17 Flex Ultra automated optical inspection (AOI) systems. We expect to recognize revenues from this order in the first quarter of 2009.
“In response to the difficult operating environment,” she continued, “we implemented pay reductions in February for most employees, including our chairman and founder Steve Case and myself. In addition, we have reduced our workforce by about 25% through two layoffs enacted in November 2008 and February 2009. The majority of these workforce reductions were related to the transition of most of our systems-related R&D and manufacturing to Singapore in the fourth quarter. Our expense structure will be streamlined further when all systems manufacturing is moved to Singapore by the end of this year’s first quarter. By the end of the second quarter, we will have also consolidated the manufacturing of our semiconductor product line into our Minneapolis facility. Semiconductor R&D, sales and marketing will remain in Portland Oregon.
Iverson added: “We expect to introduce our next-generation solder paste inspection system, as scheduled, early in this year’s second quarter. To be manufactured in Singapore and based on a new cost-reduced platform, it will be the fastest and most accurate solder paste inspection system available on the market. Capable of inspecting the smallest electronic components now in use, this system will have capabilities not available on our current SE 300, thus strengthening our competitive position in the inspection market.”
Steven K. Case, chairman and founder, said: “We are continuing to pursue several promising growth opportunities for our inspection technology. Reflecting our progress with these R&D initiatives, we have signed a contract for our embedded inspection technology and believe that contracts related to two other projects are close to being finalized. A fourth project is in the engineering qualification stage. The R&D efforts related to these projects are aimed at lowering the cost of inspection, while providing faster production through-put speeds, better ease of use, and improved resolution for inspecting progressively smaller electronic components.
Case added: “We believe these important R&D initiatives, along with our next-generation solder paste inspection system, strategic repositioning of systems R&D and manufacturing to Asia, our aggressive cost reduction activities and our strong cash position, will lead to improved operating results once the global electronics industry starts to strengthen.”
Given the ongoing impact of the weak global economy, the company is anticipating lower sales of electronic assembly sensors in the first quarter of 2009. Sales of solder paste and automated optical inspection (AOI) systems for this period are forecasted to exceed the fourth quarter level, due primarily to revenue recognition of the previously mentioned Flex Ultra AOI order. Given these factors, the company is forecasting sales of $4.5 to $5.5 million and a net loss of $0.31 to $0.36 for the first quarter of 2009 ending March 31, 2009, which includes a pre-tax severance charge of $250,000.
