SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Check One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT
For the transition period from ________________ to ________________
Commission file number 0-16577
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CYBEROPTICS CORPORATION
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(Exact name of registrant as specified in its charter)
Minnesota 41-1472057
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(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
5900 Golden Hills Drive, Minneapolis, Minnesota 55416
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(Address of principal executive offices)
(763) 542-5000
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(Issuer's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes __X__ No ____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
At August 6, 2001, 8,063,666 shares of the issuer's Common Stock, no par value,
were outstanding.
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CYBEROPTICS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
JUNE 30, 2001 DEC. 31, 2000
(Unaudited)
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ASSETS
Cash and cash equivalents $15,928 $13,097
Marketable securities 4,996 6,650
Accounts receivable, net 6,745 12,470
Inventories 9,977 9,497
Other current assets 1,616 1,710
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Total current assets 39,262 43,424
Marketable securities 10,950 8,538
Equipment and leasehold improvements, net 3,792 3,944
Intangible and other assets, net 11,205 12,911
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Total assets $65,209 $68,817
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $995 $3,433
Income taxes payable 345
Accrued expenses 2,778 5,111
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Total current liabilities 3,773 8,889
Deferred Tax Liabilities 145 145
Commitments and contingencies
Stockholders' equity:
Preferred stock, no par value, 5,000 shares
authorized, none outstanding
Common stock, no par value, 25,000 shares
authorized, 8,017 and 7,780 shares issued
and outstanding, respectively 40,270 39,714
Retained earnings 21,076 20,118
Accumulated other comprehensive income (loss) (55) (49)
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Total stockholders' equity 61,291 59,783
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Total liabilities and stockholders' equity $65,209 $68,817
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SEE THE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.
-2-
CYBEROPTICS CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)
THREE MONTHS ENDED JUNE 30,
2001 2000
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Revenues $11,308 $14,694
Cost of revenues 5,126 5,318
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Gross margin 6,182 9,376
Research and development expenses 2,221 2,495
Selling, general and administrative expenses 3,850 3,488
Other non-recurring charges 250
Amortization of goodwill and other intangibles 585 434
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Income (loss) from operations (724) 2,959
Interest income and other 465 221
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Income (loss) before income taxes (259) 3,180
Provision for income taxes 95 1,200
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Net income (loss) ($354) $1,980
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Net income (loss) per share - Basic ($0.04) $0.26
Net income (loss) per share - Diluted ($0.04) $0.24
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Weighted average shares outstanding - Basic 7,989 7,674
Weighted average shares outstanding - Diluted 7,989 8,391
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SIX MONTHS ENDED JUNE 30,
2001 2000
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Revenues $27,971 $28,192
Cost of revenues 12,100 10,512
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Gross margin 15,871 17,680
Research and development expenses 4,450 4,891
Selling, general and administrative expenses 9,028 7,108
Other non-recurring charges 250
Amortization of goodwill and other intangibles 1,167 860
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Income from operations 976 4,821
Interest income 792 565
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Income before cumulative effect of change
in accounting principle and income taxes 1,768 5,386
Provision for income taxes 810 2,080
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Net income before cumulative effect of change
in accounting principle $958 $3,306
Cumulative effect of change in accounting principle (135)
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Net income $958 $3,171
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Net income per share - Basic $0.12 $0.42
Net income per share - Diluted $0.12 $0.38
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Weighted average shares outstanding - Basic 7,975 7,625
Weighted average shares outstanding - Diluted 8,269 8,345
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SEE THE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.
-3-
CYBEROPTICS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
SIX MONTHS ENDED JUNE 30,
2001 2000
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $958 $3,171
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 2,206 1,609
Provision for losses on inventories 300 276
Provision for doubtful accounts 52 10
Amortization of restricted stock 20 20
Changes in operating assets and liabilities
excluding impact of acquisitions:
Accounts receivable 5,673 (1,016)
Inventories (780) (1,746)
Other current assets 797 (45)
Accounts payable (2,438) 423
Income taxes payable (345) 372
Accrued expenses (2,333) 1,634
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Net cash provided
by operating activities 4,110 4,708
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of marketable securities 30,138 2,615
Purchases of marketable securities (30,720) (7,481)
Purchases of businesses and technology, net of
cash acquired (164) (54)
Additions to equipment and leasehold improvements (795) (1,104)
Additions to patents (98) (99)
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Net cash used in
investing activities (1,639) (6,123)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 360 2,555
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Net cash provided by financing
activities 360 2,555
Increase in cash and cash equivalents 2,831 1,140
Cash and cash equivalents - beginning
of period 13,097 10,196
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Cash and cash equivalents - end of period $15,928 $11,336
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SEE THE ACCOMPANYING NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS.
-4-
CYBEROPTICS CORPORATION
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2001
1. INTERIM REPORTING:
The interim consolidated financial statements presented herein as of June 30,
2001, and for the six and three month periods ended June 30, 2001 and 2000, are
unaudited; however, in the opinion of management, the interim consolidated
financial statements include all adjustments, consisting only of normal
recurring adjustments, except for the cumulative effect of a change in
accounting principle recorded in the first quarter of 2000, necessary for a fair
presentation of financial position, results of operations and cash flows for the
periods presented.
As previously reported in the Company's Annual Report on Form 10-K for the year
ended December 31, 2000, the results of operations for the six month period
ended June 30, 2000 includes a $135,000 net-of-tax, charge to earnings for the
cumulative effect of adopting changes to the Company's revenue recognition
policies as required by the Securities and Exchange Commission's Staff
Accounting Bulletin (SAB) N0. 101, effective January 1, 2000.
The results of operations for the six and three month periods ended June 30,
2001, do not necessarily indicate the results to be expected for the full year.
The December 31, 2000, consolidated balance sheet data was derived from audited
consolidated financial statements, but does not include all disclosures required
by generally accepted accounting principles. These unaudited interim
consolidated financial statements should be read in conjunction with the
Company's consolidated financial statements and notes thereto, contained in the
Company's Annual Report on Form 10-K for the year ended December 31, 2000.
2. PRO-FORMA INFORMATION:
The following table presents unaudited pro forma consolidated results of
operations as if the acquisition of Imagenation Corporation (Imagenation),
acquired on October 24, 2000, had occurred as of the beginning of 2000. The
unaudited pro forma consolidated results of operations for the six months ended
June 30, 2000 include adjustments for additional amortization of identifiable
intangibles and goodwill, the reduction of interest income due to the cash used
for the acquisition and the related tax impact of these adjustments. The
unaudited pro forma consolidated results of operations are presented for
illustrative purposes only and are not necessarily indicative of the combined
financial results that actually would have resulted had the acquisitions, in
fact, occurred at the beginning of 2000(In thousands):
Pro Forma
Six Months Ended
June 30, 2000
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Revenue $30,686
Net income $ 2,773
Net income per share - Basic $0.36
Net income per share - Diluted $0.33
-5-
3. INVENTORIES (IN THOUSANDS):
June 30, Dec. 31,
2001 2000
(unaudited)
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Raw materials $5,860 $5,841
Work in process 1,128 1,177
Finished goods 2,989 2,479
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Total inventories $9,977 $9,497
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4. NET INCOME (LOSS) PER SHARE:
Basic net income per share has been computed using the weighted average number
of shares outstanding. The diluted net income per share includes the effect of
common stock equivalents for each period. The number of shares utilized in the
denominator of the diluted net income per share computation has been increased
over the number of shares used in computing basic net income per share by
294,000 equivalent shares for the six months ended June 30, 2001. The number of
shares utilized in the denominator of the diluted net income per share
computation has been increased by 720,000 and 717,000 equivalent shares for the
six and three month periods ended June 30, 2000, respectively. The shares used
in the basic and diluted net income per share computation for the three month
periods ended June 30, 2001 are the same, as additional shares in the
denominator would be anti-dilutive due to the Company's net loss. Shares
excluded due to the option exercise price exceeding the average market price
were 372,000 and 681,000 for the six and three month periods ended June 30,
2001, respectively. For the six and three month periods ended June 30, 2000,
effectively all options (less than 1,000 options excluded) were included in the
computation of diluted net income per share, as the average market price
exceeded the option exercise price of the options.
5. COMPREHENSIVE INCOME (LOSS):
Statement of Financial Accounting Standards No. 130 requires that unrealized
gains and losses on the Company's available-for-sale marketable securities and
certain foreign currency translation adjustments be included as a component of
other comprehensive income.
During the six month periods ended June 30, 2001 and 2000, total comprehensive
Income amounted to $952,000 and $3,044,000, respectively. During the three month
periods ended June 30, 2001 and 2000, total comprehensive income (loss) amounted
to ($371,000) and $1,935,000, respectively. Accumulated other comprehensive loss
at June 30, 2001 and December 31, 2000 was ($55,000) and ($49,000),
respectively.
6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES:
The Company adopted SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," on January 1, 2001. The adoption of SFAS No. 133 did not
materially impact the Company's financial position as of June 30, 2001 or its
results of operations or cash flows for the six months then ended.
The Company enters into foreign currency swap agreements to hedge short term
inter-company financing transactions with its subsidiary in the United Kingdom.
These currency swap agreements are structured to mature on the last day of each
quarter and are designated as cash flow hedges. At June 30, 2001, the Company
had one open swap agreement that was purchased on that date. As a result, any
unrealized gains or losses as of June 30, 2001 were not material. During the
three months ended June 30, 2001, the Company recognized a gain of approximately
$48,000 from settlement of a foreign currency swap agreement which offset the
$59,000 translation loss on the underlying inter-company balance.
The Company's foreign currency swap agreements contain credit risk to the extent
that its bank counter-parties may be unable to meet the terms of the agreements.
The Company minimizes such risk by limiting its counter-parties to major
financial institutions. Management does not expect material losses as a result
of defaults by other parties.
-6-
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's results and financial position during
the periods included in the accompanying financial statements. This discussion
should be read in conjunction with the Company's Annual Report on Form 10-K for
the year ended December 31, 2000 and the Company's interim consolidated
financial statements and associated notes.
The following Management's Discussion and Analysis contains "forward looking
statements" within the meaning of federal securities laws which represent
management's expectations or beliefs relating to future events, including
statements regarding trends in the industries in which the Company functions,
levels of orders, research and development expenses, taxation levels, the
sufficiency of cash to meet operating and capital expenses and the ability to
continue to price foreign transactions in U.S. currency. These and other forward
looking statements made by the Company, must be evaluated in the context of a
number of factors that may affect the Company's financial condition and results
of operations, including the following:
-- The cyclical nature of capital expenditures in the electronics
and semiconductor industry;
-- The dependence of such operations on orders of one sensor product
line from large OEM's of component placement machines in the
surface mount industry;
-- The dependence of such operations on orders from two OEM
customers;
-- The significant proportion of the Company's revenue that is
derived from export sales;
-- The dependence of the Company's manufacturing on outside
contractors and suppliers, many of which require significant lead
time;
-- The degree to which the Company is successful in protecting its
technology and enforcing its technology rights in the United
States and other countries;
-- The dependence of the Company's operations on several key
personnel;
-- The ability of the Company to effectively integrate the
operations of acquired companies and product lines;
-- The ability to effectively commercialize significant new products
introduced in 2000 and other products planned for introduction in
2001;
-- The speed of changes in technology in the microelectronics
manufacturing industry from which most of the Company's sales are
derived;
-- Competition for the functions that the Company's products perform
by larger "vision" companies and by other optical sensor
companies;
-- The ability of the Company to successfully develop acquired
in-process technology into viable products;
-7-
RESULTS OF OPERATIONS
REVENUES
The following table sets forth revenues by product group for the three and six
month periods ended June 30 (in Thousands):
Six months ended Three months ended
June 30, June 30,
2001 2000 2001 2000
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OEM Solutions:
Electronic Assembly Sensors (EAS)
Products $16,688 $19,788 $6,176 $10,245
Semiconductor Products 4,149 3,385 2,095 1,809
SMT Systems Products 7,134 5,019 3,037 2,640
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Total $27,971 $28,192 $11,308 $14,694
Revenues from the EAS sensor products decreased 16% during the six months ended
June 30, 2001 compared to the same period in 2000. During the second quarter of
2001, EAS sensor revenues decreased 40% compared to the same period in 2000.
Decreased revenues during the second quarter reflects further deterioration in
global markets for electronic assembly equipment, including demand from our
major EAS customers. A major customer of EAS products has notified the Company
to suspend sensor shipments during the first two months of this year's third
quarter as it works off excess sensor inventory. The Company believes this
suspension of scheduled shipments could continue beyond August. A second OEM
sensor customer has also reduced its forecasted requirements for the balance of
the year. As a result of these developments, sales of electronic assembly
sensors are expected to weaken further in this year's third quarter. The
Company's two largest EAS customers accounted for approximately 47% of total
revenues for the six months ended June 30, 2001, and 55% of revenues for the
comparable period in 2000. These customers accounted for approximately 45% of
revenues in the second quarter of 2001 compared to 54% in the second quarter of
2000.
Semiconductor product revenues increased 23% during the six month period ended
June 30, 2001 from the comparable period in 2000, and increased 16% for the
second quarter of 2001 compared to the same period in 2000. Increased revenue
levels are primarily the result of approximately $1.1 million and $2.2 million
of revenue generated by Imagenation during the three and six months ended June
30 2001. Because it was not acquired until October 2000, sales from Imagenation
are not reflected in first and second quarter 2000 revenues. Excluding the
impact of the Imagenation acquisition, semiconductor product revenues decreased
42% during the six month period ended June 30, 2001 from the comparable period
in 2000, and decreased 47% for the second quarter of 2001 compared to the same
period in 2000. This decrease was primarily due to a weakening demand in the
semiconductor capital equipment market which is expected to continue during the
third quarter of 2001.
SMT systems product revenues increased 42% during the six month period ended
June 30, 2001 from the comparable period in 2000, and increased 15% for
the second quarter of 2001 compared to the same period in 2000. The sales
increase was driven by sales of new-generation SE 300 solder paste inspection
and KS 100 and KS 50 AOI systems, which began contributing revenues in the
fourth quarter of 2000. SMT systems revenues reflect strong demand for the
Company's new-generation end user system products from electronic manufacturing
services (EMS) customers. As a result of industry consolidation, EMS companies
are becoming a larger proportion of worldwide electronic assembly capacity.
Growing revenues are a reflection of efforts to increase the number of EMS
companies that purchase CyberOptics' inspection products. Despite the weakness
in the electronic assembly market, the Company expects continued demand at or
about second quarter 2000 levels for its end-user system products throughout
2001, primarily as a result of its recent product introductions.
-8-
International revenues comprised approximately 72% and 77% of total revenues
during the six month periods ended June 30, 2001 and 2000, respectively, and
approximately 68% and 75% of revenues during the second quarter of 2001 and
2000, respectively. The international markets in Europe, Japan and the rest of
Asia account for a significant portion of the production capability of capital
equipment for the manufacture of electronics, the primary market for the
Company's EAS sensors and SMT systems product lines.
Revenues generated from products used primarily for SMT production (revenues
from OEM sensors and SMT systems) were approximately 85% and 88% of revenues for
the six month periods ended June 30, 2001 and 2000, respectively.
GROSS MARGIN
Gross margin for the six months ended June 30, 2001 decreased as a percent of
revenues to 57% compared to 63% during the same period in 2000. For the second
quarter of 2001, gross margin decreased to 55% of revenues compared to 64%
during the comparable period in 2000. Gross margin is highly dependent on the
level of revenues over which to spread the fixed component of cost of sales and
the related realization of manufacturing efficiencies. During 2001, gross margin
was negatively impacted by lower revenue levels. Gross margin was also
negatively impacted by reduced EAS product and semiconductor product revenues,
which have a higher margin than other products, and the increase in
new-generation SMT Systems product revenues, which generate a lower margin
during their initial introductory period. The Company expects that SMT System
products will continue to grow as a percentage of total revenue, which will
continue to impact gross margin during 2001.
RESEARCH AND DEVELOPMENT
Research and development expenses decreased 9% to $4.5 million during the six
month period ended June 30, 2001 compared to the same period of 2000. For the
second quarter of 2001, research and development expenses decreased 11% to $2.2
million compared to the same period in 2000. As a percentage of revenue,
research and development expenses decreased to 16% during the six months ended
June 30, 2001 from 17% during the comparable period in 2000, and increased to
20% in the second quarter of 2001 compared to 17% in the same period in 2000.
Decreased research and development expenses in 2001 was primarily due to cost
reduction measures initiated in the second quarter and customer funded
development recognized as a reduction in research and development expense.
Research and development expenses during the first and second quarters of 2001
were primarily focused on continued engineering development of the new high
speed solder paste inspection system, the SE 300, and KS 100 and KS 50 AOI
systems, as well as, development work on the in-process products acquired from
Imagenation and Hama. In addition, research and development expenses in 2001
included development of next generation LaserAlign products, a board alignment
camera and enhancements to the semiconductor wafer mapping sensor product
family.
Customer funded research and development is recognized as a reduction of
research and development expense. During the six months ended June 30, 2001,
customer funded research and development recognized as a reduction of research
and development expense totaled $311,000 compared to $97,000 during the first
half of 2000.
-9-
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased 27% to $9.0 million
during the six month period ended June 30, 2001 compared to $7.1 million during
the comparable period in 2000. For the second quarter of 2001, selling, general
and administrative expenses increased 10% to $3.8 million compared to the same
period in 2000. As a percentage of revenue, selling, general and administrative
expenses increased to 32% during the six month period ended June 30, 2001 from
25% in 2000, and for the second quarter increased to 34% in 2001 from 20% in
2000. Increased selling, general and administrative expenses in 2001 are
primarily the result of personnel and marketing investments made to develop the
end-user SMT systems sales and service channel, the acquisition of Imagenation
and the costs associated with operating the new sales office in Singapore.
ACQUIRED IN-PROCESS RESEARCH AND DEVELOPMENT AND OTHER NON-RECURRING CHARGES
On October 24, 2000, the Company acquired Imagenation Corporation. At the time
of acquisition, Imagenation had two products under development. The first was a
new generation of frame grabber that contains features that greatly exceed the
performance of current products. This product was introduced in June 2001. The
second is a machine vision product concept that, if successfully developed, will
integrate all vision components on a single circuit board, to be used as a
`wafer mapper' primarily in a semiconductor manufacturing environment and other
potential applications. The Company recorded a $2.1 million charge to operations
at the time of acquisition for the estimated fair value of the acquired
in-process research and devlopment. Since the date of the acquisition, there
have been no significant changes to the estimated total research and development
costs to be incurred to complete development or the estimated revenues to be
generated from these products, if successfully developed.
OTHER NON-RECURRING CHARGES
In April 2001, the Company incurred approximately $250,000 of non-recurring
severance related costs associated with cost reduction measures. Substantially,
all of these costs were paid as of June 30, 2001.
-10-
AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS
Amortization of acquired intangible assets was approximately $1,167,000 and
$585,000 for the six and three month periods ended June 30, 2001 compared to
$860,000 and $434,000 during the comparable periods of 2000. The amortization is
attributable to identifiable intangible assets and goodwill resulting from the
Company's acquisition of certain technology and other assets of Kestra and HAMA
during the second quarter of 1999 and the Company's acquisition of Imagenation
during the fourth quarter of 2000. Except for the impact of the possible future
payment of contingent consideration relating to the HAMA and Imagenation
acquisitions, the amounts of which are not yet determinable, amortization of
these intangible assets is expected to approximate $585,000 per quarter for the
remainder of fiscal 2001. The Company intends to adopt the provisions of FASB
statements No. 141 and No. 142 during the first quarter of fiscal 2002, which
will eliminate the systematic amortization of goodwill.
INTEREST AND OTHER
Interest income and other primarily includes interest earned on investments
during the period.
PROVISION FOR INCOME TAXES AND EFFECTIVE INCOME TAX RATE
The Company recorded a tax provision of $810,000 for the six month period
ended June 30, 2001, and $95,000 for the second quarter of 2001. The tax
provision during 2001 reflects both non-deductible goodwill amortization and
valuation allowances established to eliminate the future tax benefit of net
operating loss carryforwards generated by CyberOptics Ltd. (formerly Kestra) due
to uncertainty about realization. These items were offset in 2001 by benefits
from the Company's foreign sales corporation and research and development tax
credits.
ORDER RATE AND BACKLOG
CyberOptics' orders totaled $20.5 million during the six month period ended June
30, 2001 compared to $33.4 million during the same period in 2000. For the
second quarter of 2001, orders totaled $7.0 million compared to $21.0 million in
2000. Backlog totaled $4.3 million and $16.5 million at June 30, 2001 and 2000,
respectively. The scheduled shipment of the June 30, 2001 backlog is as follows
(in thousands):
3rd Quarter 2001 $ 4,087
4th Quarter 2001 and after 230
-------
Total backlog $ 4,317
-11-
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents and marketable securities increased $3.6 million to
$31.9 million as of June 30, 2001 from $28.3 million as of December 31, 2000,
primarily due to $4.1 million of cash generated from operations and $0.4 million
of cash provided by the exercise of stock options. Increases in cash were
partially offset by $1.1 million of cash used to purchase fixed assets and other
intangibles.
The Company generated $4.1 million of cash from operations during the first six
months of 2001, primarily due to net income of $1.0 million, including $2.6
million of non-cash expenses for depreciation and amortization, and the
provision for inventory obsolescence. The cash generated from operations also
included a decrease in accounts receivable of $5.7 million primarily the result
of reduced revenue levels. These items were offset somewhat by a $0.7 million
increase in inventories and a $2.4 million decrease in accounts payable and a
$2.3 million decrease in accrued liabilities. The decrease in accounts payable
and accrued liabilities are the result of lower purchasing and spending
activities associated with lower revenue volumes and spending reduction
measures.
The Company used $1.6 million of cash in investing activities during the six
month period ended June 30, 2001. The change in cash from investing activities
is partially due to changes in the level of investment in marketable securities
resulting from the purchases and maturities of those securities, which used $0.6
million of cash in 2001. In addition, the Company used approximately $1.0
million of cash for the purchase of fixed assets, the acquisition of certain
technology and other intangible assets during the six months ended June 30,
2001.
The Company generated $0.4 million of cash from financing activities during the
six months ended June 30, 2001, resulting from cash from stock option exercises.
In May 2001, the Company announced that its board of directors approved the
repurchase of up to 500,000 shares of CyberOptics' common stock. The shares may
be repurchased from time to time in the open market or through negotiated
transactions. Repurchased shares will be utilized for employee compensation
plans and other corporate purposes. As of June 30, 2001, the company has not
purchased any shares under this authorization.
The Company has no material capital commitments except for the payment of $1.1
million for certain intellectual property and a software license acquired in
July 2001. The Company believes working capital and anticipated funds from
operations will be adequate for anticipated operating needs.
-12-
OTHER FACTORS
Changes in revenues have resulted primarily from changes in the level of unit
shipments and new product introductions. The Company believes that inflation has
not had any significant effect on operations. Most of the Company's
international export sales are negotiated, invoiced and paid in U.S. dollars.
Accordingly, although currency fluctuations do not have a significant effect the
Company's revenue and income per unit, they can influence the price
competitiveness of the Company's products relative to other technologies and the
willingness of existing and potential customers to purchase products and
services.
As a result of the Kestra acquisition the Company has an operating unit located
in the UK. The Company does not believe that currency fluctuations will have a
material impact on its consolidated financial statements.
RECENT ACCOUNTING DEVELOPMENTS
In July 2001, the FASB issued statement No. 141, "Business Combinations", and
Statement N. 142, "Goodwill and Other Intangible Assets," (Collectively, "the
Statements".) The Statements eliminate the pooling-of-interest method of
accounting for business combinations and the systematic amortization of
goodwill. The Company intends to adopt the Statements during the first period
adoption is available and estimates that the adoption of the Statements will
reduce fiscal 2002 recurring amortization expense, on a pretax basis by
approximately $1.1 million.
-13-
PART II. OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of CyberOptics Corporation was held at 12:00
p.m. on Friday May 18, 2001. Shareholders holding 6,788,946 shares, or
approximately 85.23% of the outstanding shares, were represented at the meeting
by proxy or in person. Matters submitted at the meeting for vote by the
shareholders were as follows:
a. Election of Directors
The following nominees were elected to serve as members of the Board of
Directors until the annual meeting of shareholders in 2002 or until
such time as a successor may be elected:
TABULATION OF VOTES
-------------------
FOR WITHHELD
--- --------
Steven K. Case 6,325,769 463,177
Steven M. Quist 6,266,497 522,449
Michael A. Bowes 6,730,643 58,303
Alex. B. Cimochowski 6,734,983 53,963
Kathleen P. Iverson 6,734,728 54,218
Erwin A. Kelen 6,734,728 54,218
Irene M. Qualters 6,013,325 775,621
Michael M. Selzer, Jr. 6,734,841 54,105
ITEM 6 - EXHIBITS AND REPORTS ON 8-K
a. Exhibits
None
b. Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June 30,
2001, or during the period from June 30, 2001 to the date of this
quarterly report on Form 10-Q.
-14-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CyberOptics Corporation
/s/ Steven M. Quist
-------------------
Steven M. Quist, President and Chief Executive Officer
(Principal Executive Officer and
Duly Authorized Officer)
/s/ Scott G. Larson
-------------------
Scott G. Larson, Chief Financial Officer
(Principal Accounting Officer and
Duly Authorized Officer)
Dated: August 9, 2001