CyberOptics Cuts 10% of Work Force, Predicts Loss
CyberOptics Corporation, a Golden Valley-based manufacturer of sensors and inspection systems used in printed circuit board assembly, recently announced that it has cut about 10 percent of its global work force in response to a downturn in the global electronics market.
Chief Financial Officer Jeffrey Bertelsen told Twin Cities Business on Monday that the company, which previously employed about 190, cut roughly 20 jobs, and the reductions were split about evenly between its Minnesota headquarters and its Singapore operations; no particular job function was singled out for the cuts, he said.
CyberOptics is among Minnesota’s 100 largest public companies based on revenue. Its 2011 revenue climbed 7 percent to $61.1 million; net income, meanwhile, rose 39 percent to $4.4 million, or 63 cents per share.
But a weakened electronics market has led to lower sales this year. For its third quarter, which ended September 30, CyberOptics reported $11.6 million in revenue, down 32 percent. For the first nine months of 2012, revenue was down about 24 percent.
CyberOptics said that it now expects fourth-quarter revenue of between $5.5 million and $6 million—down dramatically from $13.8 million during the same period a year ago.
“The downturn in the global electronics market, which affected our operating results through the first nine months of 2012, has deepened considerably in the fourth quarter,” CEO and Chair Kathleen Iverson said in a statement. “All electronics manufacturers now appear to be deferring capital equipment orders and likely will continue doing so until global economic uncertainties are resolved and consumer confidence strengthens.”
Iverson estimated that severance expenses from the job cuts will total about $550,000; those costs, coupled with weak revenues, “will result in a more significant net loss for the fourth quarter and full year than previously anticipated,” she added.
The company did not specify how much of a net loss it anticipates, nor did it previously provide a specific earnings forecast for the fourth quarter, according to Bertelsen.
For the fourth quarter of last year, the company reported net income of $547,000, or 8 cents per share.
Following the announcement of its work force reduction, shares of CyberOptics’ stock slid 1.7 percent to close at $7.32 on Friday. Shares were trading down more than 4 percent at $7 late Monday morning.
“CyberOptics has weathered many cyclical downturns before, and while we regret the work force reduction announced today, we believe this action will enable us to operate more efficiently and effectively during this period of economic weakness,” Iverson said in a Friday statement. “With cash reserves of roughly $30 million and a strong pipeline of new products under development, we are confident CyberOptics will emerge from the current period well-positioned to capitalize upon a strengthening electronics market.”
Bertelsen told Twin Cities Business that no securities analysts are currently assigned to closely monitor CyberOptics. Some industry analysts, however, have reportedly said that the computer chip market is expected to suffer. California-based research firm IHS iSuppli, for example, expects global computer chip sales to drop 2.3 percent this year, to $303 billion, according to a report by the Star Tribune.