CyberOptics Corp. (NASDAQ:CYBE) Q2 2019 Earnings Conference Call - Final Transcript

Jul 24, 2019 • 04:30 pm ET


CyberOptics Corp. (NASDAQ:CYBE) Q2 2019 Earnings Conference Call - Final Transcript


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Good day, and welcome to the CyberOptics Second Quarter 2019 Earnings Call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Dr. Subodh Kulkarni, President and CEO of CyberOptics. Please go ahead, sir.

Subodh K. Kulkarni

Thank you. Good afternoon and thanks for taking the time to participate in CyberOptics' Second Quarter 2019 Earnings Conference Call. Joining me is Jeff Bertelsen, our CFO and Chief Operating Officer, who will review our operating results in some detail following my overview of our recent performance. We will then be pleased to answer your questions at the conclusion of our remarks.

In keeping with Regulation FD, we have made forward-looking statements regarding our outlook in this afternoon's earnings release. These forward-looking statements reflect our outlook for future results, which is subject to a number of risks that are discussed in our Form 10-K for the year ended December 31, 2018, and other filings with the Securities and Exchange Commission. We urge you to review these discussions of risk factors.

CyberOptics' recent performance, like that of many companies serving the SMT and semiconductor capital equipment space, has been affected by a cyclical market slowdown as well as uncertainty surrounding the global trade environment. The current market cycle is expected to persist during the second half of 2019 before strengthening in 2020 according to many industry observers.

Despite near-term headwinds, we will continue investing in research and development to further strengthen CyberOptics' ability to capitalize on strong growth opportunities for our 3D MRS-enabled sensors, inspection and metrology systems, and WaferSense semiconductor products. This means that our confidence in CyberOptics future is undiminished.

Turning now to our second quarter results, sales of $15 million were down 5% from $15.9 million in the year earlier period. This was at a low end of our previously issued guidance for this period. Our second quarter earnings totaled $464,000 or $0.06 per diluted share compared to $740,000 or $0.10 per diluted share in last year's second quarter. Sales of sensors, inspection and metrology systems based on our 3D MRS technology totaled $6 million in the second quarter of 2019, up 38% from $4.3 million in the year earlier period. This increase was driven by strong sales growth of 3D MRS-based SQ3000 AOI inspection systems in the second quarter. MRS-based products together with our semiconductor sensors consisting primarily of the WaferSense product line, accounted for 60% of our total second quarter revenue, up from 52% in the year earlier period.

Now I will briefly review our second quarter performance by product line. Second quarter sales of inspection and metrology systems increased 49% year-over-year to $9.9 million. This growth was paced by 75% increase in year-over-year sales growth of SQ3000 3D AOI systems. Sales of SQ3000 and SQ3000 CMM systems totaled $4.6 million in the second quarter. The competitive advantage of our 3D MRS technology platform is allowing us to capitalize upon growing worldwide acceptance and demand for high-precision inspection with our 3D AOI systems.

Reflecting this progress, over