10-Q

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Check One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

o TRANSITION PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT

For the transition period from ______ to ______

COMMISSION FILE NO. (0-16577)

CYBEROPTICS CORPORATION

(Exact name of registrant as specified in its charter)

Minnesota	41-1472057
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
5900 Golden Hills Drive MINNEAPOLIS, MINNESOTA	55416
(Address of principal executive offices)	(Zip Code)

	(763) 542-5000
(Registrant’s telephone number, including area code)

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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer” or “large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller Reporting Company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. At April 30, 2013, there were 6,925,599 shares of the registrant’s Common Stock, no par value, issued and outstanding.

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS
CYBEROPTICS CORPORATION
(Unaudited)

(In thousands, except share information)	March 31, 2013			December 31, 2012
ASSETS
Cash and cash equivalents	$	5,473		$	7,340
Marketable securities		11,807			11,438
Accounts receivable, less allowance for doubtful accounts of $745 at March 31, 2013 and $775 at December 31, 2012		6,248			6,129
Inventories		12,190			12,533
Income tax refunds receivable		811			1,325
Other current assets		1,558			1,338
Deferred tax assets		100			100
Total current assets		38,187			40,203
Marketable securities, long-term		10,165			10,435
Equipment and leasehold improvements, net		1,499			1,719
Intangible and other assets, net		174			189
Goodwill		569			569
Other assets		141			142
Deferred tax assets		349			363
Total assets	$	51,084		$	53,620
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	2,231		$	2,476
Advance customer payments		638			563
Accrued expenses		1,894			1,840
Deferred tax liability		29			29
Total current liabilities		4,792			4,908
Deferred rent		377			408
Deferred warranty revenue		180			146
Reserve for income taxes		688			686
Total liabilities		6,037			6,148
Commitments and contingencies
Stockholders’ equity:
Preferred stock, no par value, 5,000,000 shares authorized, none outstanding		—			—
Common stock, no par value, 25,000,000 shares authorized, 6,947,299 shares issued and outstanding at March 31, 2013 and 6,969,772 shares issued and outstanding at December 31, 2012		31,326			31,410
Accumulated other comprehensive loss		(352	)		(157	)
Retained earnings		14,073			16,219
Total stockholders’ equity		45,047			47,472
Total liabilities and stockholders’ equity	$	51,084		$	53,620

SEE THE ACCOMPANYING NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
CYBEROPTICS CORPORATION
(Unaudited)

	Three Months Ended March 31,
(In thousands, except per share amounts)	2013			2012
Revenues	$	6,713		$	11,280
Cost of revenues		3,774			6,045
Gross margin		2,939			5,235
Research and development expenses		1,836			1,917
Selling, general and administrative expenses		3,127			3,226
Income (loss) from operations		(2,024	)		92
Interest income and other		(104	)		35
Income (loss) before income taxes		(2,128	)		127
Income tax provision		18			35
Net income (loss)	$	(2,146	)	$	92
Net income (loss) per share – Basic	$	(0.31	)	$	0.01
Net income (loss) per share – Diluted	$	(0.31	)	$	0.01
Weighted average shares outstanding – Basic		6,961			6,933
Weighted average shares outstanding – Diluted		6,961			6,982

SEE THE ACCOMPANYING NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
CYBEROPTICS CORPORATION
(Unaudited)

	Three Months Ended March 31,
(In thousands)	2013			2012
Net income (loss)	$	(2,146	)	$	92
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments		(79	)		211
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) for the period		33			(6	)
Reclassification adjustment for losses included in net income (loss)		23			—
Total unrealized gains (losses) on available-for-sale securities		56			(6	)
Unrealized gains (losses) on foreign exchange forward contracts:
Unrealized gains (losses) for the period		(139	)		323
Reclassification adjustment for (gains) losses included in net income (loss)		(33	)		75
Total unrealized gains (losses) on foreign exchange forward contracts		(172	)		398
Other comprehensive income (loss), before tax		(195	)		603
Income tax provision related to items of other comprehensive income (loss)		—			136
Other comprehensive income (loss), net of tax		(195	)		467
Total comprehensive income (loss)	$	(2,341	)	$	559

SEE THE ACCOMPANYING NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
CYBEROPTICS CORPORATION
(Unaudited)

	Three Months Ended March 31,
(In thousands)	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(2,146	)	$	92
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		516			410
Provision for doubtful accounts		(16	)		(48	)
Deferred taxes		13			—
Foreign currency transaction losses		82			10
Realized losses on available-for-sale securities		23			—
Stock compensation costs		103			105
Changes in operating assets and liabilities:
Accounts receivable		(103	)		1,623
Inventories		87			(1,438	)
Income tax refunds receivable		514			9
Other assets		(376	)		(91	)
Accounts payable		(231	)		970
Advance customer payments		109			(58	)
Accrued expenses		18			(379	)
Net cash provided by (used in) operating activities		(1,407	)		1,205
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of available-for-sale marketable securities		765			2,592
Proceeds from sales of available-for-sale marketable securities		2,453			1,350
Purchases of available-for-sale marketable securities		(3,313	)		(8,638	)
Additions to equipment and leasehold improvements		(95	)		(412	)
Additions to patents		(19	)		(25	)
Net cash used in investing activities		(209	)		(5,133	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock repurchases		(186	)		—
Net cash used in financing activities		(186	)		—
Effects of exchange rate changes on cash and cash equivalents		(65	)		77
Net decrease in cash and cash equivalents		(1,867	)		(3,851	)
Cash and cash equivalents – beginning of period		7,340			13,791
Cash and cash equivalents – end of period	$	5,473		$	9,940

SEE THE ACCOMPANYING NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

4

NOTES TO THE (UNAUDITED) INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CYBEROPTICS CORPORATION

1. INTERIM REPORTING:

The interim condensed consolidated financial statements presented herein as of March 31, 2013, and for the three month periods ended March 31, 2013 and 2012, are unaudited, but in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position, results of operations and cash flows for the periods presented.

The results of operations for the three month period ended March 31, 2013 do not necessarily indicate the results to be expected for the full year. The December 31, 2012 consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited interim condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2012.

2. MARKETABLE SECURITIES:

Our investments in marketable securities are classified as available-for-sale and consist of the following:

	March 31, 2013
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Short-Term
U.S. government and agency obligations	$	7,577	$	13	$	(3	)	$	7,587
Corporate debt securities and certificates of deposit		4,216		4		—			4,220
Marketable securities – short-term	$	11,793	$	17	$	(3	)	$	11,807
Long-Term
U.S. government and agency obligations	$	7,964	$	20	$	—		$	7,984
Corporate debt securities and certificates of deposit		1,504		4		(1	)		1,507
Asset backed securities		629		—		—			629
Equity security		42		3		—			45
Marketable securities – long-term	$	10,139	$	27	$	(1	)	$	10,165

	December 31, 2012
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Short-Term
U.S. government and agency obligations	$	7,358	$	10	$	(35	)	$	7,333
Corporate debt securities and certificates of deposit		4,100		5		—			4,105
Marketable securities – short-term	$	11,458	$	15	$	(35	)	$	11,438
Long-Term
U.S. government and agency obligations	$	9,033	$	23	$	(23	)	$	9,033
Corporate debt securities and certificates of deposit		1,192		4		(1	)		1,195
Asset back securities		165		—		—			165
Equity security		42		—		—			42
Marketable securities – long-term	$	10,432	$	27	$	(24	)	$	10,435

Our investments in marketable debt securities all have maturities of less than three years. At March 31, 2013, marketable debt securities valued at $19,460,000 were in an unrealized gain position totaling $41,000 and marketable debt securities valued at $2,467,000 were in an unrealized loss position totaling $4,000 (all had been in an unrealized loss position for less than twelve months). At December 31, 2012, marketable debt securities valued at $19,012,000 were in an unrealized gain position totaling $42,000 and marketable debt securities valued at $2,819,000 were in an unrealized loss position totaling $59,000 (all had been in an unrealized loss position for less than twelve months).

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Net pre-tax unrealized gains for marketable securities of $40,000 at March 31, 2013 and net pre-tax unrealized losses for marketable securities of $17,000 at December 31, 2012 were recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity. In the three months ended March 31, 2013, we received proceeds of $2,453,000 from the sale of marketable securities. In the three months ended March 31, 2012, we received proceeds of $1,350,000 from the sale of marketable securities. We recognized a $23,000 loss from the sale of marketable securities in the three months ended March 31, 2013. No gain or loss was recognized on any of the sales during the three months ended March 31, 2012.

Investments in marketable securities classified as cash equivalents of $1,055,000 at March 31, 2013 and $2,824,000 at December 31, 2012 consist of the following:

	March 31, 2013
(In thousands)	Cost		Unrealized Gains		Unrealized Losses		Recorded Basis
U.S. government and agency obligations	$	300	$	—	$	—	$	300
Corporate debt securities and certificates of deposit		755		—		—		755
	$	1,055	$	—	$	—	$	1,055

	December 31, 2012
(In thousands)	Cost		Unrealized Gains		Unrealized Losses		Recorded Basis
Corporate debt securities and certificates of deposit	$	2,824	$	—	$	—	$	2,824
	$	2,824	$	—	$	—	$	2,824

Cash and marketable securities held in foreign accounts totaled $3,113,000 at March 31, 2013 and $3,585,000 at December 31, 2012.

3. DERIVATIVES:

We enter into foreign exchange forward contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies associated with our subsidiary in Singapore. These transactions are designated as cash flow hedges. The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. Hedge ineffectiveness and the amounts excluded from effectiveness testing recognized in income on cash flow hedges were not material for the three month periods ended March 31, 2013 and March 31, 2012.

The maximum length of time over which we hedge our exposure to the variability in future cash flows is 12 months. Accordingly, at March 31, 2013 and March 31, 2012, all of our open foreign exchange forward contracts had maturities of one year or less. The dollar equivalent gross notional amount of our foreign exchange forward contracts designated as cash flow hedges was approximately $7.2 million at March 31, 2013 and $10.8 million at March 31, 2012.

6

Reclassifications of amounts from accumulated other comprehensive income (loss) into earnings include accumulated gains (losses) at the time earnings are impacted by the forecasted transaction. The location in the consolidated statements of operations and comprehensive income (loss) and amounts of gains and losses related to derivative instruments designated as cash flow hedges are as follows:

	Three Months Ended March 31, 2013
(In thousands)	Pretax Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Effective Portion of Derivative			Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income (Loss)		Ineffective Portion of Gain (Loss) on Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (Loss)
Cost of sales	$	(87	)	$	25	$	—
Research and development		(30	)		5		—
Sales and marketing		(22	)		3		—
Total	$	(139	)	$	33	$	—

	Three Months Ended March 31, 2012
(In thousands)	Pretax Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Effective Portion of Derivative		Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income (Loss)			Ineffective Portion of Gain (Loss) on Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (Loss)
Cost of sales	$	228	$	(52	)	$	—
Research and development		53		(13	)		—
Sales and marketing		42		(10	)		—
Total	$	323	$	(75	)	$	—

We expect to reclassify the March 31, 2013 pretax unrealized loss recorded in accumulated other comprehensive income (loss) of $5,000 to earnings over the next 12 months with the impact offset by cash flows from underlying hedged items. The fair value of our foreign exchange forward contracts representing a loss in the amount of $8,000 as of March 31, 2013 has been recorded in accrued expenses. The fair value of our foreign exchange forward contracts representing a gain in the amount of $153,000 as of December 31, 2012 has been recorded in other current assets.

Additional information with respect to the impact of derivative instruments on other comprehensive income (loss) is included in Note 12. Additional information with respect to the fair value of derivative instruments is included in Note 4.

Our foreign exchange forward contracts contain credit risk to the extent that our bank counter-parties may be unable to meet the terms of the agreements. We minimize such risk by limiting our counter-parties to major financial institutions. We do not expect material losses as a result of defaults by other parties.

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4. FAIR VALUE MEASUREMENTS:

We determine the fair value of our assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1). The next highest priority is based on quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in non-active markets or other observable inputs (Level 2). The lowest priority is given to unobservable inputs (Level 3). The following provides information regarding fair value measurements for our marketable securities and foreign exchange forward contracts as of March 31, 2013 and December 31, 2012 according to the three-level fair value hierarchy:

			Fair Value Measurements at  March 31, 2013 Using
(In thousands)	Balance March 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. government and agency obligations	$	15,571	$	—	$	15,571	$	—
Corporate debt securities and certificates of deposit		5,727		—		5,727		—
Asset backed securities		629		—		629		—
Equity security		45		45		—		—
Total marketable securities	$	21,972	$	45	$	21,927	$	—
Derivative instruments-liabilities:
Foreign exchange forward contracts	$	8	$	—	$	8	$	—

			Fair Value Measurements at  December 31, 2012 Using
(In thousands)	Balance December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. government and agency obligations	$	16,366	$	—	$	16,366	$	—
Corporate debt securities and certificates of deposit		5,300		—		5,300		—
Asset backed securities		165		—		165		—
Equity security		42		42		—		—
Total marketable securities	$	21,873	$	42	$	21,831	$	—
Derivative instruments-assets:
Foreign exchange forward contracts	$	153	$	—	$	153	$	—

During the three months ended March 31, 2013 there were no significant transfers within the three level hierarchy. A significant transfer is recognized when the inputs used to value a security have been changed which merit a transfer between the disclosed levels of the valuation hierarchy.

The fair value for our U.S. government and agency obligations, corporate debt securities and certificates of deposit and asset backed securities are determined based on valuations provided by external investment managers who obtain them from a variety of industry standard data providers. The fair value for our equity security is based on a quoted market price obtained from an active market.

The fair value for our foreign exchange forward contracts is based on foreign currency spot and forward rates obtained from reputable financial institutions with resulting valuations periodically validated by obtaining foreign currency spot rate and forward quotes from other industry standard sources, third party or counterparty quotes. The fair value of our foreign exchange forward contracts representing a loss in the amount of $8,000 as of March 31, 2013 has been recorded in accrued expenses. The fair value of our foreign exchange forward contracts representing a gain in the amount of $153,000 as of December 31, 2012 has been recorded in other current assets.

The carrying amounts of financial instruments such as cash equivalents, accounts receivable, income tax refunds receivable, other assets, accounts payable, and all current liabilities approximate the related fair values due to the short-term maturities of these instruments. Non-financial assets such as equipment and leasehold improvements, goodwill and intangible assets are subject to non-recurring fair value measurements if they are deemed impaired. We had no re-measurements of non-financial assets to fair value during the three months ended March 31, 2013 or March 31, 2012.

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5. ACCOUNTING FOR STOCK-BASED COMPENSATION:

All equity-based payments to employees, including grants of employee stock options and restricted stock units, are recognized as an expense in our consolidated statement of operations based on the grant date fair value of the award. We utilize the straight-line method of expense recognition over the award’s service period for our graded vesting options. The fair value of stock options granted has been determined using the Black-Scholes model. The compensation expense recognized for all equity based awards is net of estimated forfeitures, which are based on historical data. We have classified equity based compensation within our statement of operations in the same manner as our cash based employee compensation costs.

Equity based compensation expense in the three months ended March 31, 2013 totaled $103,000 and includes $66,000 for stock option awards, $12,000 for our employee stock purchase plan, and $25,000 for unvested restricted stock units. Equity based compensation expense in the three months ended March 31, 2012 totaled $105,000 and includes $64,000 for stock option awards, $15,000 for our employee stock purchase plan, and $26,000 for unvested restricted stock units.

At March 31, 2013, the total unrecognized compensation cost related to non-vested equity based compensation arrangements was $878,000 and the related weighted average period over which it is expected to be recognized is 2.15 years.

Stock Options

We have two stock incentive plans that are administered under the supervision of the Compensation Committee of the Board of Directors. There are 1,044,307 shares of common stock reserved in the aggregate for issuance of options and other stock based benefits under these plans, including restricted stock units and share grants to employees, officers and others. Reserved shares underlying canceled options are available for future grant under our active plan. Options are granted at an option price per share equal to or greater than the market value on the date of grant. Generally, options granted to employees vest over a four-year period and expire seven or ten years after the date of grant. As of March 31, 2013, there were 462,287 shares of common stock available under these plans for future issuance to employees, officers and others.

The following is a summary of stock option activity during the three months ended March 31, 2013:

	Options Outstanding			Weighted Average Exercise Price Per Share
Outstanding, December 31, 2012		544,153		$	8.68
Granted		—			—
Exercised		—			—
Expired		(1,250	)		8.71
Forfeited		—			—
Outstanding, March 31, 2013		542,903		$	8.68
Exercisable, March 31, 2013		326,239		$	9.26

The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. At March 31, 2013, the weighted average remaining contractual term of all outstanding options was 4.02 years and their aggregate intrinsic value was $143,815. At March 31, 2013, the weighted average remaining contractual term of options that were exercisable was 2.93 years and their aggregate intrinsic value was $132,090. We received no proceeds from the exercise of stock options in the three months ended March 31, 2013 or 2012.

Restricted Stock Units

Our 1998 Stock Incentive Plan also permits our Compensation Committee to grant other stock-based benefits, including restricted stock units. Restricted stock units are valued at a price equal to the fair market value of our common stock on the date of grant, vest over a four year period provided the employee is still working for the company and entitle the holders to one share of our common stock for each restricted stock unit. The aggregate fair value of outstanding restricted stock units as of March 31, 2013 was $240,000.

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A summary of activity in non-vested restricted stock units for the three months ended March 31, 2013 is as follows:

Non-vested restricted stock units	Shares			Weighted Average Grant Date Fair Value
Non-vested at December 31, 2012		44,555		$	7.61
Granted		—			—
Vested		(5,438	)		7.31
Forfeited		—			—
Non-vested at March 31, 2013		39,117		$	7.65

Employee Stock Purchase Plan

We have an Employee Stock Purchase Plan available to eligible U.S. employees. Under terms of the plan, eligible employees may designate from 1% to 10% of their compensation to be withheld through payroll deductions, up to a maximum of $6,500 in each plan year, for the purchase of common stock at 85% of the lower of the market price on the first or last day of the offering period. There were no shares issued under this plan in the three months ended March 31, 2013 or March 31, 2012. As of March 31, 2013, 166,582 shares remain available for future issuance under this plan.

Stock Grant Plan for Non-Employee Directors

Our stock grant plan for non-employee directors provides for automatic grants of 1,000 shares of our common stock to each of our non-employee directors upon their re-election to the Board of Directors. The plan provides for a total of 30,000 shares of our common stock for issuance to directors and will expire on May 19, 2018. No shares were issued under this plan in the three months ended March 31, 2013 or March 31, 2012. There are presently 11,000 shares of common stock reserved in the aggregate for future issuance under this plan.

6. INVENTORIES AND WARRANTIES:

Inventories consist of the following:

(In thousands)	March 31, 2013		December 31, 2012
Raw materials and purchased parts	$	7,451	$	8,152
Work in process		1,317		1,322
Finished goods		3,422		3,059
Total inventories	$	12,190	$	12,533

Warranty costs:

We provide for the estimated cost of product warranties at the time revenue is recognized, generally for one year. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of component suppliers, warranty obligations are affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from our estimates, revisions to the estimated warranty liability would be required. Our warranty liability is included as a component of accrued expenses. At the end of each reporting period we revise our estimated warranty liability based on these factors.

A reconciliation of the changes in our estimated warranty liability is as follows:

	Three Months Ended March 31,
(In thousands)	2013			2012
Balance at beginning of period	$	694		$	985
Accrual for warranties		151			332
Settlements made during the period		(203	)		(301	)
Balance at end of period	$	642		$	1,016

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Deferred warranty revenue:

The current portion of our deferred warranty revenue is included as a component of advance customer payments. A reconciliation of the changes in our deferred warranty revenue is as follows:

	Three Months Ended March 31,
(In thousands)	2013			2012
Balance at beginning of period	$	582		$	806
Revenue deferrals		94			46
Amortization of deferred revenue		(135	)		(105	)
Total deferred warranty revenue		541			747
Current portion of deferred warranty revenue		(361	)		(482	)
Long-term deferred warranty revenue	$	180		$	265

7. INTANGIBLE ASSETS:

Intangible assets consist of the following:

	March 31, 2013							December 31, 2012
(In thousands)	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Patents	$	2,866	$	(2,692	)	$	174	$	2,847	$	(2,658	)	$	189

Amortization expense for the three month periods ended March 31, 2013 and 2012 is as follows:

	Three Months Ended March 31,
(In thousands)	2013		2012
Patents	$	34	$	41

Intangible and other long lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. An impairment loss would be recognized when future undiscounted cash flows expected to result from use of the asset and eventual disposition are less than the carrying amount.

Amortization of patents has been classified as research and development expense in the accompanying statement of operations. Estimated aggregate amortization expense based on current intangibles for the next four years is expected to be as follows: $83,000 for the remainder of 2013, $65,000 in 2014, $25,000 in 2015, and $1,000 in 2016.

8. GOODWILL:

We assess our goodwill for impairment in the fourth quarter of each year, and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In the first quarter of 2013, our stock market capitalization fell below our net book value for a period of more than 30 days, indicating that the value of our goodwill might be impaired.

In evaluating whether goodwill was impaired, we compared our fair value to our net book value or carrying value (Step 1 of the impairment test). In calculating fair value, we used the income approach. The income approach is a valuation technique under which we estimate future cash flows using financial forecasts. Future estimated cash flows are discounted to their present value to calculate fair value. When considering fair value, we also gave consideration to the control premium in excess of our current market capitalization that might be obtained from a third party acquirer. In the situation where net book value or carrying value exceeds fair value, the amount of impairment loss must be measured. The measurement of impairment (Step 2 of the impairment test) is calculated by determining the implied fair value of goodwill, which equals the excess of any remaining fair value over the fair values assigned to other assets and liabilities. Goodwill impairment is measured as the excess of the carrying amount of goodwill over its implied fair value.

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In determining fair value under the income approach, our expected cash flows are affected by various assumptions. Fair value on a discounted cash flow basis uses our business plan and projections as the basis for expected future cash flow forecasts, with an estimation of residual growth rates thereafter. For our first quarter 2013 impairment test, we utilized a 15% discount rate and our terminal value was based on a multiple equal to 6 times our projected future earnings before interest, taxes, depreciation and amortization. We believe the significant assumptions used in our 2013 goodwill impairment test, including a 15% discount rate, are reflective of the assumptions currently used in the marketplace to evaluate fair value. Our recent analyses indicate that our goodwill at March 31, 2013 and December 31, 2012 in the amount of $569,000 is not impaired.

9. SIGNIFICANT CUSTOMERS:

Export sales were 80% of revenue in the three months ended March 31, 2013 and 87% of revenue in the three months ended March 31, 2012. Virtually all of our export sales are negotiated, invoiced and paid in U.S. dollars. Export sales by geographic area are summarized as follows:

	Three Months Ended March 31,
(In thousands)	2013		2012
Americas	$	56	$	497
Europe		1,716		3,386
Asia		3,491		5,800
Other		114		144
Total export sales	$	5,377	$	9,827

Our LaserAlign sensor family has historically accounted for a significant portion of our sales and profitability. Our revenue, results of operations and cash flows would be negatively impacted if our LaserAlign customers, primarily Juki and Assembleon, are unsuccessful selling the products into which our sensors are incorporated, design their products to function without our sensors, purchase sensors from other suppliers, or otherwise terminate their relationships with us.

We are dependent upon two customers, Juki and Assembleon, for a significant portion of our total revenue. For the three months ended March 31, 2013, sales to Juki accounted for 8% of our total revenue and sales to Assembleon accounted for 10% of our total revenue.

10. RE-ORGANIZATION AND RESTRUCTURE CHARGE:

In the third quarter of 2012, we consolidated research and development for our semiconductor products from Portland, Oregon into our Minneapolis headquarters facility. We believe this move will streamline our business and provide our sensor engineers in Minneapolis with more efficient access to our WaferSense® technology and products. The related restructure charge from this action of $217,000 was fully paid prior to December 31, 2012.

Additional severance costs of $523,000 were incurred in the fourth quarter of 2012 when we reduced our global workforce by approximately 10% or 20 employees in response to the sluggish economy and weak SMT and semiconductor market conditions. No restructuring or severance costs were incurred in the three months ended March 31, 2013 or March 31, 2012.

A summary of our restructuring accrual is as follows:

(In thousands)	Fourth Quarter 2012 Workforce Reduction
Balance, January 1, 2013	$	192
Cost incurred		—
Payments made		126
Balance, March 31, 2013	$	66

The remaining accrued severance in the amount of $66,000 at March 31, 2013 will be paid prior to July 1, 2013.

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11. NET INCOME (LOSS) PER SHARE:

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Net income per diluted share is computed by dividing net income by the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares consist of common shares to be issued upon exercise of stock options, restricted stock units and from participation in our employee stock purchase plan, as calculated using the treasury stock method. All potentially dilutive common equivalent shares are excluded from the calculation of net loss per diluted share for the three months ended March 31, 2013 due to their anti-dilutive effect. The components of net income (loss) per basic and diluted share are as follows:

(In thousands except per share amounts)	Net Loss			Weighted Average Shares Outstanding		Per Share Amount
Three Months Ended March 31, 2013:
Basic	$	(2,146	)		6,961	$	(0.31	)
Dilutive effect of common equivalent shares		—			—		—
Dilutive	$	(2,146	)		6,961	$	(0.31	)

(In thousands except per share amounts)	Net Income		Weighted Average Shares Outstanding		Per Share Amount
Three Months Ended March 31, 2012:
Basic	$	92		6,933	$	0.01
Dilutive effect of common equivalent shares		—		49		—
Dilutive	$	92		6,982	$	0.01

The calculation of diluted net income (loss) per common share excludes 586,000 potentially dilutive shares for the three months ended March 31, 2013 and 362,000 potentially dilutive shares for the three months ended March 31, 2012, because their effect would be anti-dilutive.

12. COMPREHENSIVE INCOME (LOSS):

Taxes related to items of other comprehensive income (loss) are as follows:

	Three Months Ended March 31, 2013								Three Months Ended March 31, 2012
(In thousands)	Before Tax			Tax Provision /(Benefit)		Net of Tax Amount			Before Tax			Tax Provision /(Benefit)			Net of Tax Amount
Foreign currency translation adjustments	$	(79	)	$	—	$	(79	)	$	211		$	—		$	211
Net changes related to available-for-sale securities:
Unrealized gains (losses)		33			—		33			(6	)		(2	)		(4	)
Reclassification adjustment for losses included in net income (loss)		23			—		23			—			—			—
Total net changes related to available-for-sale securities		56			—		56			(6	)		(2	)		(4	)
Unrealized gains (losses) on foreign exchange forward contracts:
Unrealized gains (losses)		(139	)		—		(139	)		323			112			211
Reclassification adjustment for (gains) losses included in net income (loss)		(33	)		—		(33	)		75			26			49
Total unrealized gains (losses) on foreign exchange forward contracts		(172	)		—		(172	)		398			138			260
Other comprehensive income (loss)	$	(195	)	$	—	$	(195	)	$	603		$	136		$	467

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Reclassification adjustments are made to avoid double counting in comprehensive income (loss) items that are also recorded as part of net income (loss). Reclassifications to earnings related to cash flow hedging instruments are discussed in Note 3. Income taxes are not provided for foreign currency translation adjustments relating to permanent investments in international subsidiaries. We have recorded a valuation allowance against substantially all of our United States and Singapore based deferred tax assets. Accordingly, we do not expect to record a tax provision for items of other comprehensive income (loss) until such time as the valuation allowance is substantially reduced. The effect of the reclassifications from comprehensive income (loss) to earnings by line item is as follows:

Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income (a)						Affected Line Item in the Statements of Operations
	Three Months Ended March 31,
(In thousands)	2013			2012
Unrealized losses on available-for-sale securities	$	(23	)	$	—		Interest income and other
		—			—		Income tax provision
	$	(23	)	$	—		Net of tax
Unrealized gains (losses) on foreign exchange forward contracts	$	25		$	(52	)	Cost of revenues
		5			(13	)	Research and development expenses
		3			(10	)	Selling, general and administrative expenses
		33			(75	)	Total before tax
		—			26		Income tax benefit
	$	33		$	(49	)	Net of tax

(a) Amounts in parentheses indicate debits to profit/loss.

At March 31, 2013 and December 31, 2012, components of accumulated other comprehensive income (loss) are as follows:

(In thousands)	March 31, 2013			December 31, 2012
Unrealized gains (losses) on available-for-sale securities	$	33		$	(23	)
Unrealized gains (losses) on effective portion of foreign exchange forward contracts, net		(61	)		111
Foreign currency translation adjustments		(324	)		(245	)
Balance at end of period	$	(352	)	$	(157	)

13. INCOME TAXES:

We recorded income tax expense of $18,000 in the three months ended March 31, 2013, reflecting an effective tax rate of a negative 1%, compared to income tax expense of $35,000 in the three months ended March 31, 2012, reflecting an effective tax rate of 28%. In the fourth quarter of 2012, we recorded a valuation allowance against substantially all of our United States and Singapore based deferred tax assets. Our income tax expense and effective tax rate in the three months ended March 31, 2013, reflects minimal state income tax expense and foreign income tax expense associated with our subsidiaries in the United Kingdom and China.

We currently have significant deferred tax assets as a result of temporary differences between taxable income on our tax returns and U.S. GAAP income, research and development tax credit carry forwards and federal, state and foreign net operating loss carry forwards. A deferred tax asset generally represents future tax benefits to be received when temporary differences previously reported in our financial statements become deductible for income tax purposes, when net operating loss carry forwards are applied against future taxable income, or when tax credit carry forwards are utilized on our tax returns. We assess the realizability of our deferred tax assets and the need for a valuation allowance based on the guidance provided in current financial accounting standards.

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Significant judgment is required in determining the realizability of our deferred tax assets. The assessment of whether valuation allowances are required considers, among other matters, the nature, frequency and severity of any current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, our experience with loss carry forwards not expiring unused and tax planning alternatives.

At December 31, 2012, we concluded that a valuation allowance was needed for substantially all of our United States and Singapore based deferred tax assets due to the decline in our level of profitability and near term financial outlook. In analyzing the need for a valuation allowance, we first considered our history of operating results for income tax purposes over the past three years in each of the tax jurisdictions where we operate, our financial performance in recent quarters, statutory carry forward periods and tax planning alternatives. Finally, we considered both our near and long-term financial outlook and timing regarding when we might return to profitability. After considering all available evidence, both positive and negative, we concluded that a valuation allowance with respect to substantially all of our U.S. and Singapore based deferred tax assets, was required at March 31, 2013 and December 31, 2012.

Deferred tax assets at March 31, 2013 include net operating loss carry forwards incurred in the UK by CyberOptics Ltd., which was acquired in 1999. The utilization of these net operating loss carry forwards is dependent on CyberOptics Ltd.’s ability to generate sufficient UK taxable income during the carry forward period.

The valuation allowance at March 31, 2012 was needed for various long-term state tax credit carry forwards, state operating loss carry forwards and capital losses for which recovery is not deemed to be more likely than not.

14. CONTINGENCIES:

We are periodically a defendant in miscellaneous claims and disputes in the ordinary course of business. While the outcome of these matters cannot be predicted with certainty, management presently believes the disposition of these matters will not have a material effect on our financial position, results of operations or cash flows.

In the normal course of business to facilitate sales of our products and services, we at times indemnify other parties, including customers, with respect to certain matters. In these instances, we have agreed to hold the other parties harmless against losses arising out of intellectual property infringement or other types of claims. These agreements may limit the time within which an indemnification claim can be made, and almost always limit the amount of the claim. It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Historically, payments made, if any, under these agreements have not had a material impact on our operating results, financial position or cash flows.

15. RECENT ACCOUNTING DEVELOPMENTS:

In February 2013, the FASB issued amended disclosure requirements for amounts classified out of other comprehensive income to improve the transparency of reporting these reclassifications (ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income). The amended guidance requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. We adopted the amended guidance effective January 1, 2013. Our adoption of the amended disclosure requirements had no impact on our consolidated financial results as the amendments relate only to changes in financial statement presentation.

16. SHARE REPURCHASE:

In October of 2012, our Board of Directors authorized a $3.0 million share repurchase program. The common stock is being acquired from time to time in open market transactions, block purchases and other transactions complying with the Securities and Exchange Commission’s Rule 10b-18. We adopted a 10b5-1 trading plan to implement the repurchase program. In the three months ended March 31, 2013, we spent $186,000 to repurchase a total of 27,911 shares of our common stock. As of March 31, 2013, we may spend up to an additional $2.8 million for share repurchases under the October 2012 repurchase authorization. We did not repurchase any stock in the three months ended March 31, 2012.

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17. SUBSEQUENT EVENT – NEW SINGAPORE LEASE:

In April 2013, we entered into a new lease agreement for our existing 20,000 square foot Singapore facility that will become effective on July 25, 2013. The new agreement provides that we will lease the facility through July 24, 2016. Future minimum lease payments due under the lease agreement are approximately $1.3 million. We estimate an increase in average annual rental expense over the term of the new lease of approximately $60,000. At the end of the lease period in 2016, we will have the option to renew the lease for an additional 3 years.

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ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING POLICIES AND ESTIMATES:

The preparation of the financial information contained in this 10-Q requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate these estimates on an ongoing basis, including those related to allowances for doubtful accounts and returns, warranty obligations, inventory valuation, the carrying value and any impairment of intangible assets, income taxes and derivatives and hedging activities. These critical accounting policies are discussed in more detail in the Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Form 10-K for the year ended December 31, 2012.

FORWARD LOOKING STATEMENTS:

The following management’s discussion and analysis contains a number of estimates and predictions that are forward looking rather than based on historical fact. Among other matters, we discuss (i) our level of anticipated revenues, gross margins, expenses, and net income or loss for the second quarter and full year 2013; (ii) the potential margin improvements resulting from our next-generation products; (iii) the timing of initial revenue and margin improvements from other new products that we have under development, that have been recently introduced or we anticipate introducing in the future; (iv) our beliefs regarding trends in the general economy and its impact on markets for our equipment and (v) the impact of currency fluctuations on our operations. Although we have made these statements based on our experience and best estimate of future events, there may be events or factors that we have not anticipated, and the accuracy of our statements and estimates are subject to a number of risks, including those identified in our Annual Report on Form 10-K for the year ended December 31, 2012.

RESULTS OF OPERATIONS:

General

Our products are sold primarily into the electronics assembly, DRAM and Flash memory, and semiconductor fabrication capital equipment markets. We sell products in these markets both to original equipment manufacturers of production equipment and to end-user customers that assemble circuit boards and semiconductor wafers and devices. Historically these markets have been cyclical, and have experienced periods of rapid growth as worldwide capacity is added to support increased consumer demand for electronic products, and new capital equipment is purchased as a result of technology changes in electronics components, such as miniaturization, and changing production requirements. These periods of growth have historically been followed by periods of excess capacity and reduced capital spending.

Our results in the first three months of 2013 were impacted by weak conditions in the surface mount technology (SMT) capital equipment market. As a result, we experienced reduced year over year demand for our SMT sensor and system products in the first quarter of 2013. Backlog at March 31, 2013 totaled $2.5 million, compared to $2.6 million at the end of last year’s fourth quarter. We believe the electronics market bottomed out during the first quarter of 2013 and is now strengthening as indicated by recent sales bookings and the 16% sequential increase in our first quarter sales to $6.7 million, up from $5.8 million in the fourth quarter of 2012. In addition to generally weak market conditions, our first quarter operating results reflect the seasonal slowdown in sales that we typically experience in the first and fourth quarters of most years. For the second quarter ending June 30, 2013, we are forecasting sales of $9.0 to $10.0 million and a net loss of $0.15 to $0.20 per share. As activity levels in China and the Americas continue to strengthen, we expect to report improved operating results over the balance of the year.

We booked the initial sales of our recently introduced QX600 automated optical inspection (AOI) system in the first quarter. Later in this year’s second quarter, we expect to introduce the next-generation SE600 solder paste inspection (SPI) system. These important next-generation systems are engineered with the improved resolution, performance and usability required to accurately inspect the smallest circuit board components used in smart phones and tablets and other applications requiring higher resolution due to smaller component sizes. During the first quarter, we also realized the initial sales of our new SE500Ultra SPI system, which offers a 30% increase in inspection speed for high-volume production runs.

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Recent product introductions mark our first steps toward strengthening our competitive position in our current markets, particularly in the mobile computing and high performance segments where much of the industry’s growth is occurring. We also intend to expand our technology into adjacent targeted markets that require high precision optical 3D inspection. To achieve our growth objectives, we have taken a number of key steps. We have: implemented a functional organization focused on our systems business, which has included centralizing our R&D operation under a single leader to sharpen our focus and effectiveness on enhanced and next generation system products; consolidated sales and product marketing under one leader to focus on systems growth opportunities; earmarked expenditures to expand our marketing organization; and committed resources to developing innovative new products with ease of use and inspection performance that exceed the metrics of current and foreseeable competitive products. With cash and marketable securities of $27.4 million at the end of the first quarter, we believe we have the resources required to attain our growth objectives over the next several years.

Our Board of Directors has authorized a $3.0 million share repurchase program. The common stock is being acquired from time to time in open market transactions, block purchases and other transactions complying with the Securities and Exchange Commission’s Rule 10b-18. We adopted a 10b5-1 trading plan to implement the repurchase program. As of March 31, 2013, we have repurchased approximately 31,000 shares of our common stock under this authorization for an aggregate repurchase price of $206,000.

Revenues

Our revenues decreased by 40% to $6.7 million in the three months ended March 31, 2013, from $11.3 million in the three months ended March 31, 2012. The following table sets forth revenues by product line for the three month periods ended March 31, 2013 and 2012:

	Three Months Ended March 31,
(In thousands)	2013		2012
OEM Alignment Sensors	$	1,738	$	4,178
Semiconductor Sensors		1,794		1,551
SMT Inspection Systems		3,181		5,551
Total	$	6,713	$	11,280

Sales of OEM alignment sensors declined from the year-earlier period due to a persistently sluggish global economy and weak SMT market conditions. Sales of OEM alignment sensors decreased by $2.4 million or 58% to $1.7 million in the three months ended March 31, 2013, down from $4.2 million in the three months ended March 31, 2012. We anticipate that second quarter sensor sales will increase on a sequential basis as our OEM customers increase their sensor purchases reflecting the initial strengthening of the global SMT capital equipment market.

Revenues from sales of our semiconductor sensors increased by $243,000 or 16% to $1.8 million in the three months ended March 31, 2013, from $1.6 million in the three months ended March 31, 2012. The revenue increase in the three months ended March 31, 2013 resulted from strong growth in sales of our WaferSense® products, offset in part by continuing declines in sales of older wafer mapper and frame grabber products. We anticipate that sales of wafer mapper and frame grabber products will continue to slowly decline in the future, given that the products are mature, and any new investment is expected to be minimal. Sales of WaferSense products increased $440,000 or 42% to $1.5 million in the three months ended March 31, 2013, from $1.0 million in the three months ended March 31, 2012.

Revenue from sales of our stand-alone SMT inspection systems decreased by $2.4 million or 43% to $3.2 million in the three months ended March 31, 2013, from $5.6 million in the three months ended March 31, 2012. Sales of SPI systems declined by $609,000 or 32% to $1.3 million in the three months ended March 31, 2013, from $1.9 million in the three months ended March 31, 2012. Aggregate sales of AOI systems decreased by $1.7 million or 54% to $1.4 million in the three months ended March 31, 2013, from $3.1 million in the three months ended March 31, 2012. Revenue from sales of in-line QX500 and QX600 AOI systems decreased by $2.0 million or 73% to $726,000 in the three months ended March 31, 2013, from $2.7 million in the three months ended March 31, 2012. Although all SMT inspection system sales were impacted by weak market conditions, lower sales of QX500 and QX600 AOI systems were somewhat offset by our new QX100 tabletop and QX100i in-line AOI systems which were introduced early in 2012. Revenue from these products increased by $395,000 or 122% to $719,000 in the three months ended March 31, 2013, compared to $324,000 in the three months ended March 31, 2012.

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Sales of SMT inspection systems in the three months ended March 31, 2013 were impacted by a persistently sluggish global economy and weak conditions in the global SMT capital equipment market. In addition, because a significant portion of the customers that use our SPI and AOI systems produce laptop computers, our sales were negatively impacted in the first quarter of 2013 by ongoing changes in the electronics market, as consumers moved away from laptops and instead to smart phones, tablets and other mobile computing devices such as those of Apple and Samsung that are manufactured by companies that have not purchased our systems. We introduced our QX600 AOI system in the first quarter of 2013. In this year’s second quarter, we expect to introduce the next-generation SE600 SPI system. These next generation systems are engineered with the improved resolution, performance and usability required to accurately inspect the smallest circuit board components used in smart phones, tablets, and other applications requiring higher resolution due to smaller component sizes. We believe that introduction of these new system products and other next generation products planned for the future will strengthen our competitive position in the SMT inspection systems market and that technology trends toward smaller components and increased production speeds will increase the demand for our products in the future.

Export revenue totaled $5.4 million or 80% of total revenue in the three months ended March 31, 2013, compared to $9.8 million or 87% of total revenue in the three months ended March 31, 2012. Export revenue as a percentage of total revenue declined in the three months ended March 31, 2013 because export sales of OEM alignment sensors were lower in the first quarter of 2013 when compared to the same period of 2012.

Cost of Revenue and Gross Margin

Cost of revenue decreased by $2.3 million or 38% to $3.8 million in the three months ended March 31, 2013, from $6.0 million in the three months ended March 31, 2012 due to the 40% decline in sales revenue in the first quarter of 2013 compared to the same period of 2012.

Gross margin as a percentage of OEM alignment and semiconductor sensor sales was 48% in both the three months ended March 31, 2013 and March 31, 2012.

Gross margin as a percentage of stand-alone SMT inspection systems sales was 39% in the three months ended March 31, 2013, compared to 44% in the three months ended March 31, 2012. The decrease in gross margin percentage in the three months ended March 31, 2013 was due largely to our sales mix, with lower margin SPI sales representing a larger proportion of our overall SMT system sales in the first quarter of 2013 when compared to the same period of 2012.

Our markets are highly price competitive, particularly the electronic assembly market, resulting in continual pressure on our gross margins. We compensate for pricing pressure by introducing new products with more features and improved performance and through manufacturing cost reduction programs. For example, our latest stand-alone SMT inspection system products combine a reduction in cost with enhanced performance. Other recently introduced products, including our off-line and integrated in-line QX100 and QX100i AOI tabletop systems, solar wafer alignment camera and WaferSense sensors, have more favorable margins than our existing products.

Operating Expenses

Research and development expense was $1.8 million or 27% of revenue in the three months ended March 31, 2013, compared to $1.9 million or 17% of revenue in the three months ended March 31, 2012. The decrease in research and development expense in the three months ended March 31, 2013 resulted from lower wages and benefits due to our 2012 restructuring activities. Our research and development efforts in the first quarter of 2013 were focused on new products, including our QX600 AOI system and our next-generation SE600 SPI system. Both systems are engineered with significantly improved resolution, performance and usability required for accurately inspecting the smallest circuit board components used in smart phones, tablets, and other applications requiring higher resolution due to smaller component sizes. During the first quarter we also completed and released our new SE500Ultra SPI system, which offers a 30% increase in inspection speed. We anticipate that research and development expenses will increase, particularly in the later part of 2013, as we accelerate development of new system products.

Selling, general and administrative expense was $3.1 million or 47% of revenue in the three months ended March 31, 2013, compared to $3.2 million or 29% of revenue in the three months ended March 31, 2012. The decrease in selling, general and administrative expense in the three months ended March 31, 2013 resulted from lower wages and benefits due to our 2012 restructuring activities.

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Operating expenses as a percentage of revenue were higher in the first quarter of 2013 when compared to the first quarter of 2012 due to the year over year decline in our revenue. We implemented restructuring actions in the third and fourth quarters of 2012 to reduce our losses given the recent revenue declines. Given that we have earmarked expenditures to expand our marketing organization and committed resources to developing innovative new products with ease of use and inspection performance, we anticipate that operating expenses will increase later in 2013.

Goodwill Impairment

We analyzed our goodwill for impairment in the first quarter of 2013 and concluded that there was no impairment. The analysis was triggered by a decline in our stock market capitalization below our net book value for a period of more than 30 days. Factors which could trigger an impairment charge in the future include further significant erosion in industry or economic trends, a significant decline in future estimated cash flows or a significant decline in our stock market capitalization relative to net book value.

Re-organization and Restructure Charge

In the third quarter of 2012, we consolidated research and development for our semiconductor products from Portland, Oregon into our Minneapolis headquarters facility. We believe this move will streamline our business and provide our sensor engineers in Minneapolis with more efficient access to our WaferSense technology and products. We anticipate annual savings of up to $800,000 resulting from consolidation of research and development for our semiconductor products. The related restructure charge from this action of $217,000 was fully paid prior to December 31, 2012.

Additional severance costs of $523,000 were incurred in the fourth quarter of 2012 when we reduced our global workforce by approximately 10% or 20 employees in response to the sluggish economy and weak SMT and semiconductor market conditions. We anticipate annual savings of up to $1.4 million from the fourth quarter workforce reduction. No restructuring or severance costs were incurred in the three months ended March 31, 2013 or March 31, 2012.

A summary of our restructuring accrual is as follows:

(In thousands)	Fourth Quarter 2012 Workforce Reduction
Balance, January 1, 2013	$	192
Cost incurred		—
Payments made		126
Balance, March 31, 2013	$	66

The remaining accrued severance in the amount of $66,000 at March 31, 2013 will be paid prior to July 1, 2013.

Interest Income and Other

Interest income and other includes interest earned on investments and gains and losses associated with foreign currency transactions, including intercompany financing transactions associated with our subsidiaries in the United Kingdom and Singapore. Interest income and other decreased in the three months ended March 31, 2013, compared to the same period of 2012, due to losses resulting from foreign currency transactions and lower interest income resulting from lower rates of interest earned on invested funds.

We recognized a loss from foreign currency transactions of $118,000 in the three months ended March 31, 2013, compared to income from foreign currency transactions of $35,000 in the three months ended March 31, 2012.

Provision for Income Taxes and Effective Income Tax Rate

We recorded income tax expense of $18,000 in the three months ended March 31, 2013 reflecting an effective tax rate of a negative 1%, compared to income tax expense of $35,000 in the three months ended March 31, 2012, reflecting an effective tax rate of 28%. In the fourth quarter of 2012, we recorded a valuation allowance against substantially all of our United States and Singapore based deferred tax assets. Our income tax expense and effective tax rate in the three months ended March 31, 2013, reflects minimal state income tax expense and foreign income tax expense associated with our subsidiaries in the United Kingdom and China.

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Order Rate and Backlog

Our orders totaled $6.6 million in the three months ended March 31, 2013, compared to $6.2 million in the three months ended December 31, 2012, and $12.0 million in the three months ended March 31, 2012. Backlog totaled $2.5 million at March 31, 2013, $2.6 million at December 31, 2012 and $5.6 million at March 31, 2012.

The scheduled shipment (or estimated timing of revenue for systems recognized upon acceptance) for backlog at March 31, 2013 is as follows:

(In thousands)	Backlog
2nd Quarter 2013	$	2,030
3rd Quarter 2013 and after		483
Total backlog	$	2,513

LIQUIDITY AND CAPITAL RESOURCES:

Our cash and cash equivalents decreased by $1.9 million in the three months ended March 31, 2013, principally resulting from $1.4 million of cash used in operating activities, $95,000 of new marketable security purchases, net of proceeds from maturities and sales of marketable securities, purchases of fixed asset and capitalized patent costs totaling $114,000, and $186,000 of cash used to repurchase common stock. Our cash and cash equivalents fluctuate in part because of maturities of marketable securities, and investment of cash balances in marketable securities, or from other sources of cash. Accordingly, we believe the combined balances of cash and marketable securities provide a more reliable indication of our available liquidity. Combined balances of cash and marketable securities decreased by $1.8 million to $27.4 million as of March 31, 2013 from $29.2 million as of December 31, 2012.

Operating activities used $1.4 million of cash in the three months ended March 31, 2013. Cash used by operations included a net loss of $2.1 million, which included non-cash expenses totaling $721,000 for depreciation and amortization, provision for doubtful accounts, deferred taxes, non-cash gains and losses from foreign currency transactions, realized losses on available-for-sale securities transactions and stock compensation expenses.

Changes in operating assets and liabilities using cash included increases in accounts receivable of $103,000, other assets of $376,000, and decreases in accounts payable of $231,000. Changes in operating assets and liabilities providing cash included decreases in inventory of $87,000, income tax refunds receivable of $514,000 and increases in advance customer payments and accrued expenses of $127,000. The increase in accounts receivable was due to higher sales levels in the first quarter of 2013 compared to the fourth quarter of 2012. Other assets have increased due to slow payment of GST and VAT refunds by governmental authorities. Better sales forecasting and inventory management resulted in lower inventory purchases in the first quarter of 2013 and a corresponding reduction in inventory and accounts payable levels. Lower income tax refunds receivable are due to refunds received in the first quarter of 2013. Accrued expenses and other liabilities increased due to additional pre-payments from customers prior to product shipment in the first quarter of 2013, when compared to the fourth quarter of 2012.

Operating activities provided $1.2 million of cash in the three months ended March 31, 2012. Cash provided by operations included net income of $92,000, which included non-cash expenses totaling $477,000 for depreciation and amortization, provision for doubtful accounts, non-cash gains and losses from foreign currency transactions and stock compensation expenses. Changes in operating assets and liabilities using cash included increases in inventories of $1.4 million, increases in other assets of $91,000, decreases in accrued expenses of $379,000 and decreases in advance customer payment of $58,000. Changes in operating assets and liabilities providing cash included decreases in accounts receivable of $1.6 million and increases in accounts payable of $970,000. Inventories increased as first quarter 2012 sales levels were lower than anticipated. Accrued expenses and other liabilities decreased due to lower commission and incentive compensation accruals, resulting from lower sales levels and payment of 2011 incentive compensation accruals in the three months ended March 31, 2012. The decrease in accounts receivable was due to lower sales levels in the first quarter of 2012, compared to the fourth quarter of 2011, resulting in more cash receipts compared to new sales in the quarter. The increase in accounts payable resulted from increased material purchases near the end of the first quarter.

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Investing activities used $209,000 of cash in the three months ended March 31, 2013, compared to using $5.1 million of cash in the same period last year. Changes in the level of investment in marketable securities, resulting from the purchases, sales and maturities of those securities used $95,000 of cash in the three months ended March 31, 2013, compared to using $4.7 million of cash in the same period last year. We used $114,000 of cash in the three months ended March 31, 2013 for the purchase of fixed assets and capitalized patent costs, compared to using $437,000 of cash for this purpose in the three months ended March 31, 2012.

Financing activities used $186,000 of cash in the three months ended March 31, 2013 for the repurchase of common stock. There were no significant financing activities in the three months ended March 31, 2012.

At March 31, 2013, we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of establishing off-balance sheet arrangements or other contractually narrow or limited purposes.

Except for our obligations under facilities leases and purchase contracts, we had no material commitments for expenditures as of March 31, 2013. Purchase commitments for inventory can vary based on the volume of revenue and resulting inventory requirements. While there were no material commitments, we evaluate investment opportunities that come to our attention and could make a significant commitment in the future. In April 2013, we entered into a new lease for our existing facility in Singapore that will run for a period of 36 months from expiration of the current lease in July 2013 through July 2016. Our rent expense under the new lease will increase by approximately $60,000 per year.

Our Board of Directors has authorized a $3.0 million share repurchase program. The common stock is being acquired from time to time in open market transactions, block purchases and other transactions complying with the Securities and Exchange Commission’s Rule 10b-18. We adopted a 10b5-1 trading plan to implement the repurchase program. As of March 31, 2013, we may spend up to an additional $2.8 million for share repurchases under the authorized program.

Our cash, cash equivalents and marketable securities totaled $27.4 million at March 31, 2013. We believe that on-hand cash, cash equivalents and marketable securities, coupled with anticipated future cash flow from operations, will be adequate to fund our cash flow needs for the foreseeable future, including contractual obligations discussed above.

Inflation and Foreign Currency Transactions

Changes in our revenues have resulted primarily because of changes in the level of unit shipments and the relative strength or weakness of the worldwide electronics and semiconductor fabrication capital equipment markets. We believe that inflation has not had a significant effect on our operations.

Most of our international export sales are negotiated, invoiced and paid in U.S. dollars. We manufacture our SMT system products in Singapore and a portion of our raw material purchases are denominated in Singapore dollars. We also have R&D and sales personnel located in Singapore and sales offices located in other parts of the world. Although currency fluctuations do not significantly affect our revenue, they can impact our costs and influence the price competitiveness of our products and the willingness of existing and potential customers to purchase units.

We enter into foreign exchange forward contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies associated with our subsidiary in Singapore. These transactions are designated as cash flow hedges. The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged transaction affects earnings. The maximum length of time over which we hedge our exposure to the variability in future cash flows is 12 months and, accordingly, at March 31, 2013, all of our open foreign exchange forward contracts had maturities of one year or less. The dollar equivalent gross notional amount of our foreign exchange forward contracts designated as cash flow hedges at March 31, 2013 was approximately $7.2 million.

At March 31, 2013, our open foreign exchange forward contracts were in an unrealized loss position equal to $8,000 on a pre-tax basis due to a weakening of the U.S. dollar in relation to the Singapore dollar during the time from when we first entered into these contracts through March 31, 2013. If the exchange rate between the U.S. dollar and the Singapore dollar were to remain unchanged over the next twelve months, we would realize this pre-tax loss through our statement of operations. However, because we do not fully hedge all of our future anticipated cash flows in Singapore dollars, if the U.S. dollar were to weaken in future periods in relation to the Singapore dollar, the unrealized loss on our open foreign exchange forward contracts would be reduced, but costs that are not hedged would increase. The ultimate impact of any fluctuation in the relationship between the U.S. dollar and Singapore dollar is dependent on the level of Singapore denominated cash flows in future periods.

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Recent Accounting Developments

In February 2013, the FASB issued amended disclosure requirements for amounts classified out of other comprehensive income to improve the transparency of reporting these reclassifications (ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income). The amended guidance requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. We adopted the amended guidance effective January 1, 2013. Our adoption of the amended disclosure requirements had no impact on our consolidated financial results as the amendments relate only to changes in financial statement presentation.

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ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4 – CONTROLS AND PROCEDURES

a.          Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.

b.          During the quarter ended March 31, 2013, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1A – RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2012, which could materially affect our business, financial condition or future results.

ITEM 2C – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Company repurchase of equity securities:

Period	(a) Total Number of Shares Purchased		(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
January 1, 2013 to January 31, 2013		9,975	$	6.81		12,915	$	2,911,424
February 1, 2013 to February 28, 2013		7,791	$	6.65		20,706	$	2,859,644
March 1, 2013 to March 31, 2013		10,145	$	6.50		30,851	$	2,793,682
Total		27,911	$	6.65		30,851	$	2,793,682

(1) On October 30, 2012, we publicly announced that our Board of Directors authorized a $3.0 million share repurchase program. The common stock is being acquired from time to time in open market transactions, block purchases and other transactions complying with the Securities and Exchange Commission’s Rule 10b-18. Also on October 30, 2012, we announced our intention to adopt a 10b5-1 trading plan to implement the repurchase program. Shares were purchased in open market transactions pursuant to this 10b5-1 plan. Amount reflected in column (d) represents the dollar value of shares that remain to be repurchased under the plan.

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ITEM 6 – EXHIBITS

10:	Tenancy agreement between RBC Investor Services Trust Singapore Limited and CyberOptics Singapore Private Limited dated April 4, 2013
31.1:	Certification of Chief Executive Officer pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes Oxley Act of 2002
31.2:	Certification of Chief Financial Officer pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes Oxley Act of 2002
32:	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes Oxley Act of 2002
101:	Financial statements formatted in Extensible Business Reporting Language: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statement of Operations, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows and (v) the Notes to the Interim Condensed Consolidated Financial Statements.

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/ Kathleen P. Iverson
	By Kathleen P. Iverson, Chief Executive Officer and Chair
	(Principal Executive Officer and Duly Authorized Officer)
	/s/ Jeffrey A. Bertelsen
	By Jeffrey A. Bertelsen, Chief Financial Officer
	(Principal Accounting Officer and Duly Authorized Officer)
Dated: May 13, 2013

25

EX-10

EXHIBIT 10

Original

Certificate of Stamp Duty

Stamp Certificate Reference	:	183033-01LA4-1-139834813
Stamp Certificate Issued Date	:	18/04/2013
Document Reference Number	:	2013041800662 ver. 1.0
Document Description	:	Tenancy Agreement (Ad valorem)
Date of Document		04/04/2013

Property	:	21 UBI ROAD 1, #02-01, SINGAPORE 408724
Lessor/ Landlord	:	RBC INVESTOR SERVICES TRUST SINGAPORE LIMITED(AS TRUSTEE OF CAMBRIDGE INDUSTRIAL TRUST) (UEN-LOCAL CO - 199504677Z)
Lessee/ Tenant	:	CYBEROPTICS (SINGAPORE) PRIVATE LIMITED (UEN-LOCAL CO - 200103162D)
Stamp Duty	:	S$ 4,224.00
Total Amount	:	S$ 4,224.00

To confirm if this Stamp Certificate is genuine, you may do an online check at https://estamping.iras.gov.sg. Under Stamp Duty Resource, select Verify Stamp Certificate Authenticity.
RS95351Z - 18/04/2013	183033-01LA4-1-139834813
2013041800662
3c55cd753301495d2c7e0a425d000b4c

Page 1 of 1

04 APR 2013

RBC INVESTOR SERVICES TRUST SINGAPORE LIMITED
(in its capacity as trustee of Cambridge Industrial Trust)

CYBEROPTICS (SINGAPORE) PRIVATE LIMITED

TENANCY AGREEMENT

CONTENTS

CLAUSE			PAGE
1.	TERMS AND INTERPRETATION		3
2.	LETTING		3
3.	THE TENANT’S COVENANTS		3
4.	THE LANDLORD’S COVENANTS		14
5.	RIGHTS RESERVED BY THE LANDLORD		16
SCHEDULE 1 -		INTERPRETATION	24
SCHEDULE 2 -		TERMS AND PARTICULARS OF RENT	28
SCHEDULE 3 -		SCOPE FOR PROPERTY MANAGEMENT AND MAINTENANCE SERVICE	31
SCHEDULE 4 -		PROHIBITED MATERIAL / ITEMS / ACTIVITIES ON THE PREMISES, BUILDING OR PROPERTY (FOR THE PURPOSE OF SHARIAH COMPLIANCE)	33
SCHEDULE 5 -		LIST OF LICENCES	33
ANNEXURE A -		PLAN OF PREMISES

Tenancy Agreement — Cyberoptics (Singapore) Private Limited - Page 2

THIS TENANCY AGREEMENT is made on 04 APR 2013

Between:

(1)	The Landlord: As defined in Item 2 of Schedule 2.
(2)	The Tenant: As defined in Item 3 of Schedule 2.

This Tenancy Agreement Witnesseth as follows:

1.      Terms And Interpretation

1.1    Unless otherwise defined, words and expressions used in this Tenancy Agreement shall have the meanings set out in Schedule 1 unless the context requires otherwise.

1.2    The Schedules form part of this Tenancy Agreement.

2. Letting

2.1    Letting: The Landlord lets the Premises to the Tenant for the Term on the Tenant agreeing to pay to the Landlord, the Rent and Service Charge in accordance with the provisions of Schedule 2.

2.2    Possession: The Landlord shall give and the Tenant shall take possession of the Premises on the date of this Tenancy Agreement or such other date as the parties hereto may agree (Possession Date).

3. The Tenant’s Covenants

The Tenant hereby covenants with the Landlord as follows:

3.1	Payment of Rent, Service Charge and other Payments:
(a)	The Tenant shall pay the (i) Rent and Service Charge calculated at the Rent Rate and Service Charge rate specified in Items 11(a) and (c) of Schedule 2 respectively on the Floor Area specified in Item 6 of Schedule 2; and (ii) reimbursements and other payments, at the times and in the manner specified in this Tenancy Agreement without any deduction or demand whatsoever and there shall be no abatement of Rent, reimbursements and other payments hereby reserved by reason of any claim by the Landlord against the Tenant whether for non-performance or breach of the Landlord’s obligations hereunder or otherwise. For the avoidance of doubt, the Tenant must not exercise any right or claim to withhold the Rent, reimbursements and other payments hereby reserved, or any right or claim to legal or equitable set off.
(b)	The Tenant shall pay the Rent, Service Charge, reimbursement and other payments hereby reserved to the Landlord by way of GIRO payments through a bank account notified by the Landlord to the Tenant for this purpose. All bank charges levied in respect of any unsuccessful GIRO deductions together with an administrative charge (subject to applicable GST) of Singapore Dollars Twenty (S$20), shall be borne by the Tenant.
(c)	The first payment of the Rent after the execution of this Tenancy Agreement is payable on or before the Term Commencement Date and shall be paid via GIRO payment through a bank account notified by the Landlord to the Tenant for this purpose and is for the period of one (1) month from the commencement date of

Tenancy Agreement — Cyberoptics (Singapore) Private Limited - Page 3

	the Term. In the event that the Term Commencement Date falls on a day other than the first day of a month, the Tenant shall pay to the Landlord pro-rated Rent calculated from the Term Commencement Date up to the day immediately before the first day of the following month, together with the Rent in advance for the following month, and thereafter all payments shall be made on the first day of each month via GIRO.
(d)	Any sums received by the Landlord from the Tenant towards payment or part payment of the Outstanding Debt may be applied at the Landlord’s sole and absolute discretion, in or towards payment of any part of the Outstanding Debt and such application by the Landlord shall override any directions given by the Tenant that such sums be specifically applied in or towards satisfaction of any particular portion or specific items or part thereof of the Outstanding Debt.
3.2	Payment of the Security Deposit:
(a)	On or before the Term Commencement Date, the Tenant shall pay and maintain to the Landlord the amount stated in Item 8 of Schedule 2 by way of Security Deposit which said sum shall be paid by way of cash on or before the Term Commencement Date and maintained throughout the Term as security for the due observance and performance by the Tenant of all and singular the several covenants, conditions, stipulations and agreements on the part of the Tenant herein contained.
(b)	In the event that the Landlord shall exercise its right of set off against the Security Deposit or any part of the Security Deposit remains outstanding for any reason whatsoever, the Tenant shall immediately pay to the Landlord an amount sufficient to restore the Security Deposit to the amount stated in Item 8 of Schedule 2 or such other amount as may be specified by the Landlord.
(c)	Further the Landlord reserves the right, at its absolute discretion, to credit any payment made by the Tenant to its account as the Security Deposit until the Security Deposit has been received in full.
(d)	In addition to and without prejudice to the rights of the Landlord at law, in equity and herein, if the Tenant shall at any time fail to observe or perform any of the terms covenants, conditions and obligations herein contained, the Landlord may, at its option, appropriate and apply all or any part of the Security Deposit held by the Landlord to set off all and any outstanding Rent or to compensate the Landlord for its loss or damage or provide for any contingent liabilities incurred by the Landlord due to any breach of any of the terms covenants, conditions and obligations on the part of the Tenant to be performed and or observed under this Tenancy Agreement. Any appropriation by the Landlord of the Security Deposit shall not be deemed to be a waiver by the Landlord of any non-payment or non-performance on the part of the Tenant and shall not preclude the Landlord from exercising any of its other rights and obligations hereunder. In the event the Landlord appropriates or applies the Security Deposit in accordance with this Clause 3.2, the Tenant shall immediately on demand pay to the Landlord a sufficient amount to restore the Security Deposit to the amount stated in Item 8 of Schedule 2 or such other amount as may be specified by the Landlord.
(e)	The Security Deposit shall be refunded to the Tenant free of interest after the expiry of the Term provided that the Tenant has duly performed and observed all of its covenants, conditions and obligations and is not in breach of any of the terms contained herein.

Tenancy Agreement — Cyberoptics (Singapore) Private Limited - Page 4

3.3     Payment for Utilities: The Tenant shall pay all charges including any taxes now or in the future imposed, in respect of water, gas, electricity and any other services supplied and metered to the Premises which shall be consumed or supplied on or to the Premises and shall pay all necessary hire charges for any equipment or appliances supplied to the Tenant by SP Services Ltd or other appropriate authority or company appointed by the Landlord. Any costs in connection with the opening of account and/or upgrading of the water, gas, electrical, power and/or other supply of services to the Premises, as may be required by the Tenant shall be borne by the Tenant.

3.4	Insurance:
(a)	The Tenant shall keep current at all times during the Term and during any period of holding over an adequate insurance policy for industrial all risks, and in respect of all goods (including machinery and all contents and internal partitions) belonging to or held in trust by the Tenant within the Premises, against all loss and damage including against loss or damage by fire or water.
(b)	The Tenant shall keep current at all times during the Term in respect of the Premises an adequate public liability insurance policy (including products liability).
(c)	The Tenant expressly agrees at its own cost, to take out such other insurance policies in such amounts as the Landlord may specify from time to time, having regard to the market practice and after consultation with the Tenant.
(d)	All insurance policies referred to in this Clause 3.4 shall be taken out with such insurer as shall be approved in advance by the Landlord.
(e)	Tenant shall furnish to the Landlord on demand all policies taken up and the receipts for payment of premium in respect thereof.
(f)	The Tenant shall not do or permit or suffer to be done anything whereby any policies of insurance taken up on the Premises for the time being subsisting may be vitiated or rendered void or voidable or whereby the rate of premium on any insurance policy shall be liable to be increased and shall make good all damage suffered by the Landlord and repay to the Landlord all sums paid by the Landlord by way of increased premium and all expenses incurred by the Landlord in or about any renewal of such policy or policies rendered necessary by a breach or non-observance of this covenant.
3.5	Administrative Fees, Legal Costs and Expenses:
(a)	The Tenant agrees to pay the Landlord (on a full indemnity basis):
	(i)	all stamp duties in respect of this Tenancy Agreement;
	(ii)	all the Landlord’s legal costs and expenses incurred in enforcing any provision of this Tenancy Agreement in the event of a breach by the Tenant; and
	(iii)	all the Landlord’s costs and expenses (including solicitors’ costs and costs of the Landlord’s architect, engineer or surveyor where applicable, and including any and all subletting and other fees, taxes, or charges by whatever name called in respect or in connection with subletting) incurred in connection with every application made by the Tenant for any consent or approval required under this Tenancy Agreement whether or not such consent or approval shall be granted or given.

Tenancy Agreement — Cyberoptics (Singapore) Private Limited - Page 5

(b) Each party shall bear their own solicitors’ costs incurred in the preparation of this Tenancy Agreement.

3.6    Permitted Use: Unless otherwise permitted by the Landlord, Head Lessor and the Authorities, the Tenant shall at all times use the Premises strictly and only for the use specified in Item 9 of Schedule 2, subject to the Tenant obtaining all necessary approvals and licences (if any) from the Authorities at the Tenant’s own cost and absolute responsibility. Provided always that the Tenant shall under no circumstances use the Premises or Property or any part thereof for activities listed under Schedule 4.

3.7	Keep in Tenantable Repair:
(a)	The Tenant shall at all times keep clean and in a good and tenantable repair and condition (fair wear and tear excepted), the Premises (including the structures within), the interior, the flooring, the interior plaster or other surface material or rendering on walls and ceilings, the fixtures, all doors, windows, glass, locks, fastenings, installations and fittings for light and power, the Conducting Media within the Property and serving the Premises, sanitary, water, gas and electrical apparatus and fire detection and fire fighting installations comprised in the Premises. The Tenant’s obligations in this Clause 3.7 shall extend to all improvements and additions to the Premises and to all of the Landlord’s fixtures, fittings and appurtenances of whatever nature affixed or fastened to the Premises.
(b)	In addition to and without prejudice to the other provisions of this Tenancy Agreement, the Tenant shall at all times, at the Tenant’s cost and expense, comply with the provisions set out in Schedule 3.
(c)	The Tenant shall be wholly responsible if any damage or injury is caused to the Landlord or to any person whomsoever directly or indirectly on account of the condition of any part of the interior of the Premises (including flooring, walls, ceiling, doors, windows, curtain wall and its related parts including fluoro-carbon coating thereon (if any) and other fixtures) and the Premises and shall fully indemnify the Landlord against all claims, demands, actions and legal proceedings whatsoever made against the Landlord by any person in respect thereof. In the interpretation and application of the provisions of this sub-clause, the decision of the surveyor or architect of the Landlord shall be final and binding upon the Tenant.

3.8    To Make Good Damage to Premises: The Tenant shall make good any breakage, defect or damage to the Premises or any part thereof or to any facility or appurtenances thereof or to any glass window, glass door, glass wall or glass panel of the Premises and all damaged or broken lighting, electrical equipment (including light bulbs and fluorescent tubes) and plumbing installed in or about the Premises thereof occasioned by want of care, misuse or abuse on the part of the Tenant or the Tenant’s servants, agents, independent contractors, sub-contractors or licensees.

3.9	The Landlord’s Right of Inspection and Right Of Repair:
(a)	The Tenant shall permit the Landlord and its servants or agents at all reasonable times to enter into, inspect and view the Premises and examine the condition, to ensure that the provisions of this Tenancy Agreement has been observed and also to take a schedule of fixtures in the Premises.
(b)	Upon notice being given by the Landlord to the Tenant of any breach of covenant, defect, want of repair, removal of fixture or unauthorised alteration or addition or painting work for which the Tenant shall be responsible under the terms,

Tenancy Agreement — Cyberoptics (Singapore) Private Limited - Page 6

conditions, stipulations, obligations and agreements herein, the Tenant shall execute and complete all repairs, works, replacements or removals set out in the said notice within fourteen (14) days after the service of such notice (or within such timeframe as may be reasonably required by the Landlord), to the satisfaction of the Landlord or its surveyor. If the Tenant shall not execute or complete all repairs, works, replacements or removals set out in the said notice within fourteen (14) days after the service of such notice, it shall be lawful for the Landlord’s agents or workmen to enter into the Premises and execute such repairs, works, replacements or removals. The Tenant shall pay to the Landlord immediately on demand all costs and expenses so incurred by the Landlord with penalty from the date of expenditure until the date they are paid by the Tenant to the Landlord, such costs and expenses and interest to be recoverable as if they were rent in arrears.

(c)

The Tenant shall permit the Landlord or the Head Lessor and its agents and workmen and all others employed by the Landlord or the Head Lessor at all reasonable times, upon giving to the Tenant prior notice (except in any case which the Landlord or Head Lessor considers an emergency in which case no notice is required) to enter upon the Premises to effect or carry out any maintenance, repairs, alterations or additions or other works which the Landlord or Head Lessor may consider necessary or desirable to any part of the Premises or the water, electrical and other facilities and services of the Premises; without payment of compensation for any nuisance, annoyance, inconvenience or damage caused to the Tenant subject to the Landlord (or other person so entering) exercising such right in a reasonable manner.

3.10    Notice of Damage: The Tenant shall give notice in writing forthwith to the Landlord of any damage that may occur to the Premises or of any damage to or want of repair or defects in the water pipes, electrical wiring, fittings, fixtures or other facilities provided by the Landlord or of any circumstances likely to cause the Premises or any person therein to be in danger, at risk or subject to any hazard.

3.11	Alterations and Additions:
(a)	The Tenant shall not, without the prior written consent of the Landlord, Head Lessor and/or relevant Authorities, make or permit to be made any alterations or additions to or affecting the structure or exterior of the Premises or the appearance of the Premises as seen from the exterior.
(b)	The Tenant shall not and shall not permit any person to paint or make any additions or alterations or exert any force or load on the curtain wall, its frame structure and all its related parts or to place or affix any structures or articles or materials thereon which would otherwise render the warranty granted in favour of the Landlord in respect of such wall and structure null and void.
	Alterations and additions for such purpose of this Clause shall include but shall not be limited to the following works relating to:
	(i)	internal partitions, floors and ceilings within the Premises;
	(ii)	electrical wiring, conduits, light fittings and fixtures;
	(iii)	air conditioning installations, ducts and vents;
	(iv)	fire protection devices;

Tenancy Agreement — Cyberoptics (Singapore) Private Limited - Page 7

	(v)	all plumbing and gas installations, pipes, apparatus, fittings and fixtures;
	(vi)	all mechanical and electrical engineering works; and
	(vii)	painting of the Premises.
(c)	The Tenant shall, in connection with the alterations and additions:
	(i)	remove all waste material and debris from the Property in a manner satisfactory to the Landlord; and
	(ii)	make good to the satisfaction of the Landlord all damage to the Property resulting from the execution of the alterations and additions.
(d)	The Tenant undertakes to ensure that any such proposed alterations and additions shall be in compliance with all applicable laws and regulations and shall, furnish to the Landlord copies of all necessary permits, consents, licences, certificates and other approvals for the proposed alterations and additions. All planning and other consents necessary or required pursuant to the provisions of any statute, rule, order, regulation or by-law for any alteration or addition to the Premises or any part thereof, shall be applied for and obtained by the Tenant at the Tenant’s own cost and expense, such expenses to be paid immediately by the Tenant when they fall due.
(e)	The Tenant shall carry out and complete all alterations and additions to the Premises in accordance with plans, layouts, designs, drawings, specifications and using materials approved by the Landlord in a good and workmanlike manner and in accordance with all planning and other consents referred to in Clause 3.11(d), and in compliance with the reasonable requirements of the Landlord’s consultants.
(f)	The Tenant shall submit to the Landlord as-built drawings relating to all such alterations, additions or other works. If the Tenant fails to do so, the Landlord shall be entitled to take all action necessary (including engaging consultants to make necessary inspections and to prepare the relevant as-built drawings and making payments to the Tenant’s consultants). All costs and expenses so incurred by the Landlord together with interest from the date of expenditure until the date they are paid by the Tenant to the Landlord shall be recoverable from the Tenant as if they were rent in arrears.
(g)	The Tenant shall effect and maintain at the Tenant’s cost and expense, comprehensive risk insurance policies and public liability policies, from the period of the commencement of the additions and alterations, with an insurance company in Singapore approved by the Landlord. Copies of such policies shall be furnished to the Landlord by the Tenant without demand, prior to the commencement of the additions and alterations.
(h)	The Tenant shall indemnify the Landlord against (i) any breach, non-observance or non-performance in obtaining any of the consents mentioned in Clause 3.11(a) herein and (ii) any claims, losses, damages, demands or actions brought by any person arising out of or incidental to the execution of the additions and alterations.

3.12   Yield Up in Repair at End of Term and Reinstatement: At the expiration or earlier determination of the Term:

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(a)	The Tenant shall surrender to the Landlord all keys giving access to all parts of the Premises irrespective of whether or not the same have been supplied by the Landlord.
(b)	The Tenant shall reinstate (as set out in Clause 3.12(d)) within the Reinstatement Period and quietly yield up the Premises in the bare condition (fair wear and tear excepted) to the satisfaction of the Landlord after removal of all additions and improvements made by the Tenant to the Premises and all fixtures which may be fixed or fastened to or upon the Premises by the Tenant save for those which the Landlord has expressly agreed at its absolute discretion need not be reinstated.
(c)	Prior to yielding up of the Premises, the Landlord and the Tenant shall conduct one or more joint- inspections of the Premises, including but not limited to the fixtures and fittings thereon and on the mechanical and electrical equipment systems (where applicable) and any defects, damage or items requiring rectification (which shall include replacing) by the Landlord shall be rectified by the Tenant (at its own cost) to the satisfaction of the Landlord before yielding up of the Premises.
(d)	If the Tenant fails to reinstate the Premises by the end of the Reinstatement Period or fails to effect the rectification before yielding up of the Premises in accordance with the provisions of this Clause 3.12, the Landlord may effect the same at the Tenant’s cost and expense. All costs and expenses incurred by the Landlord together with double the amount of Rent in accordance with Clause 3.13 which the Landlord shall be entitled to receive had the period within which such works effected by the Landlord been added to the Term, shall be paid by the Tenant within seven (7) days of the Landlord notifying the Tenant of the amount thereof, and in this connection, a certificate from the Landlord as to the amount of costs and expenses incurred by the Landlord shall be conclusive and binding on the Tenant. The Tenant shall pay to the Landlord on demand all costs and expenses so incurred by the Landlord with penalty from the date of expenditure until the date they are paid by the Tenant to the Landlord, such costs and expenses and penalty to be recoverable as if they were rent in arrears.
(e)	For the purpose hereof, the term “reinstate” shall include, but not limited to, the washing of the whole of the interior of the Premises (including the cleaning of all glass, doors and windows) and the painting with two coats of oil paint or emulsion paint or other appropriate treatment of all of the internal parts of the premises previously so treated.

3.13    Holding Over: If the Tenant continues to occupy the Premises beyond the expiration or earlier determination of the Term or fails to deliver vacant possession of the Premises to the Landlord and/or fails to reinstate the Premises in accordance with Clause 3.12 after the expiration or earlier determination of the Term, the Tenant shall pay to the Landlord for every month or part thereof of such holding over double the amount of Rent or, at the Landlord’s discretion, the prevailing market rent for the Premises and such service charges as may be determined and such holding over shall not constitute a renewal of this Tenancy Agreement. During such holding over all provisions of this Tenancy Agreement with necessary changes shall apply. The inclusion of this Clause shall not be construed as the Landlord’s consent for the Tenant to hold over.

3.14    Approvals, Licences and Permits: The Tenant shall obtain, effect and keep effective all approvals, licences and permits which may be required by the Landlord, Head Lessor and relevant Authorities in connection with the use and/or occupation of the Premises by the Tenant, including but not limited to those set out in Schedule 5. All costs, expenses (including appointment of consultants) and fees incurred for the

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obtaining/maintaining of such approvals, licences and permits shall be borne by the Tenant.

Copies of all necessary approvals, licences and permits shall be given to the Landlord forthwith upon receipt/renewal thereof.

3.15   To Inform the Landlord of Notices: The Tenant shall immediately give to the Landlord a copy of any notice or letter received by the Tenant from any governmental, statutory, public or other authority in respect of the Premises.

3.16   To Comply with All Notices: The Tenant shall promptly at the Tenant’s own expense comply and cause its sub-Tenants, servants or employees to comply with all notices, order, requisition or direction made or issued by the Authorities in respect of the Premises as may be imposed on the occupier of the Premises.

3.17   To Comply with Head Lease:

(a)	The Tenant shall observe and promptly at the Tenant’s own expense comply with and cause its servants, employees, agents, invitees, licensees and visitors to observe and comply with all such requirements as may be imposed on the occupier of the Premises by any statute, ordinance or Act now or hereafter in force and with all terms and conditions of the Head Lease.
(b)	The Tenant shall indemnify the Landlord for and against all costs, losses and damages suffered by the Landlord as a result of the Tenant’s breach of this Clause 3.17.

3.18   To Indemnify the Landlord: The Tenant shall indemnify, keep indemnified and hold the Landlord harmless from and against:

(a)

all claims, demands, writs, summons, actions, suits, proceedings, judgments, orders, decrees, damages, costs, losses and expenses of any nature whatsoever which the Landlord may suffer or incur in connection with loss of life, personal injury and/or damage or loss to property arising from or out of any occurrence in, upon or at the Premises or the use of the Premises or any part thereof or the breach of any of the obligations herein by the Tenant or by any of the Tenant’s employees, independent contractors, agents, invitees or licensees: and

(b)

all loss and damage to the Premises, the Building and to all property and goods therein caused directly or indirectly by the Tenant or the Tenant’s employees, independent contractors, agents, invitees or licensees and in particular but without limiting the generality of the foregoing caused directly or indirectly by the use or misuse, waste or abuse of water, electricity or gas or by faulty fittings or fixtures of the Tenant or the failure of the Tenant to maintain the Premises and/or the Building or observe the covenants in accordance with its obligations herein.

3.19   Dangerous Goods: The Tenant shall not store or bring upon the Premises or any part thereof any goods or things which are unlawful or which in the opinion of the Landlord are of an obnoxious, dangerous or hazardous nature or any explosive, combustible or inflammable substance provided always that if such explosive, combustible or inflammable materials are stored in the Premises or any part thereof with the consent in writing of the Landlord. Any increase in the premium of fire or other insurance as may have been taken out by the Landlord shall be borne by the Tenant.

3.20   Discharge of Dangerous Substances: The Tenant must not permit any noxious or any deleterious, objectionable, dangerous, poisonous or explosive matter or substance

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to be discharged into any of the Conducting Media, and must take all measures to ensure that any effluent discharged into the Conducting Media does not harm the environment, or corrode or otherwise harm the Conducting Media or cause obstruction or deposit in the Conducting Media and that the Tenant shall take all precautions to ensure that no noxious substances are spilled or deposited on the Property and that contamination does not occur.

3.21   Safety Measures and Fire Safety:

(a)

The Tenant shall keep the Premises and all fixtures, fittings, installations and appliances therein in a safe condition by adopting all necessary measures to prevent any outbreak or occurrence of fire in the Premises, to comply with the requirements of the Singapore Civil Defence Force’s Fire Safety Bureau and the Fire Safety Act (Chapter 109A) and upon written notice from the Landlord to comply with such reasonable requirements as the Landlord may in its discretion stipulate as to fire precautions relating to the Premises.

(b)

The Tenant shall comply with insurance, sprinkler and fire alarm regulations in respect of any partitions or other works which may be effected by the Tenant upon the Premises and to pay the costs, fees and expenses of the mechanical and engineering consultants appointed by the Landlord to ensure that the Tenant complies with such insurance, sprinkler and fire alarm regulations and to pay the costs of any alterations to the said partitions or other works or of repairing or replacing any damaged sprinklers and/or fire alarm installations incurred by reason of the non-compliance by the Tenant with such regulations.

3.22    No Cooking or Sleeping: The Tenant shall not without the written consent of the Landlord, Relevant Authorities or Head Lessor use the Premises or any part thereof or permit the same to be used for the cooking or the preparation of food nor to permit or suffer any one to sleep or reside therein but shall keep the Premises securely fastened and locked at all times when it is unattended.

3.23   The Tenant’s Manager and Authorised Personnel: The Tenant shall inform the Landlord of the name and contact number of the Tenant’s manager who is responsible for the daily management of the Tenant’s business at the Premises including the name and contact number of the authorised personnel to contact in the case of emergency and to promptly notify the Landlord of any changes in the appointment of and particulars of such manager and/or authorised personnel.

3.24    No Parking: The Tenant shall not permit or cause to be permitted the placing or parking of bicycles, motor-cycles or scooters, trolleys and other wheeled vehicles except in places approved by the Authorities.

3.25    To Attend to Complaints: The Tenant undertakes to attend to any complaints by any members of the public against the Tenant which come to the attention of the Landlord to the satisfaction of the Landlord.

3.26   Use of Lifts:

(a)	The Tenant shall ensure that the use of the lifts does not exceed the permissible load limits prescribed for such lifts.
(b)	Where service and/or cargo lifts are available, the Tenant shall not permit or allow the contractors, workmen or cleaners (with or without equipment tools) engaged by the Tenant to use the passenger lifts of the Property and shall ensure that they use only the service and/or cargo lifts.

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3.27   No Auction or Prohibited Trade:

(a)

The Tenant shall not use or permit or suffer the Premises or any part thereof to be used for an auction sale or to conduct any sale described as a bankruptcy sale or closing down sale or any sale carrying a description which in the opinion of the Landlord has a negative connotation.

(b)

The Tenant shall not use the Premises or any part thereof for any gambling or any unlawful or immoral or improper purpose nor carry out or permit to be carried out any noxious, immoral, noisome, offensive or illegal act, trade, business, occupation or calling in or upon the Premises and shall not do or permit to be done any act or thing which may become a nuisance to or cause annoyance, grievance, damage or disturbance to or give cause for reasonable complaint from the tenants or occupants of neighbouring premises or of other buildings adjoining the Premises.

3.28   No Overloading: The Tenant shall not without the prior written consent of the Landlord at any time load or permit or suffer to be loaded any part of the floors of the Premises to a weight greater than the permissible load limits prescribed in the relevant building plans or approved by the Authorities for the respective floors (or such other weight as may be prescribed by the Landlord) and shall when required by the Landlord distribute any load on any part of the floor of the Premises in accordance with the directions and requirements of the Landlord, and in the interpretation and application of the provisions of this Clause relating to loading requirements the decision of the surveyor or engineer or architect of the Landlord shall be final and binding upon the Tenant. The fees of any architect, engineer or other consultant employed by the Landlord for the purpose of considering, approving and supervising any load under this Clause and all costs and expenses incurred by the Landlord in connection therewith shall be borne by the Tenant and paid forthwith upon notice being given by the Landlord to the Tenant. All costs and expenses so incurred by the Landlord together with interest from the date of expenditure until the date they are paid by the Tenant to the Landlord shall be recoverable from the Tenant as if they were rent in arrears.

3.29   Not to Interfere with Mechanical and Electrical and other Systems: The Tenant shall not use or permit to be used any heating or cooking devices or any other devices, equipment or machines which may interfere with the efficient running of the lift system, lighting, or power system or any other mechanical or electrical system or apparatus in the Premises.

3.30   Cleaning, Servicing and Landscaping:

(a)	The Tenant shall undertake at the Tenant’s own cost and expense the regular cleaning, servicing and maintenance of all fixtures, fittings, installations and appliances in or serving the Premises including but not limited to ventilation system, gas valves, sanitary and waste pipes and domestic waste water pipes (if applicable).
(b)	The Tenant shall pay on demand to the Landlord the costs and expenses incurred by the Landlord in cleaning any drains and pipes choked or blocked up in the Premises due to the fault or default of the Tenant or its employees, customers, invitees or licensees.
(c)	The Tenant shall keep the Premises clean and free from dirt and rubbish and throw all trade waste, debris, dirt and rubbish (and in particular wet waste) in proper receptacles and shall arrange for the regular removal thereof from the Premises. The Tenant shall on demand pay to the Landlord the costs and

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	expenses of making good any damage resulting from breach of this Clause by the Tenant or by any of the Tenant’s sub-Tenants, employees or visitors and shall indemnify the Landlord for any costs incurred in the removal and clearance of any rubbish or trade waste in the event the Tenant is in breach of this provision.
(d)	Any cleaners employed by the Tenant for the purposes of cleaning the Premises shall be at the sole expense and responsibility of the Tenant. The Landlord shall not be liable for any misconduct or negligent acts or defaults of the said cleaning contractor or contractors.

3.31   No Disturbing Noises: The Tenant shall not do or produce, or suffer or permit to be done or produced any music, sound or noise which is/are or may be a nuisance or annoyance to the Landlord or to tenants or occupiers of adjacent or neighbouring premises.

3.32   Not to Cause any Odours and Fumes: The Tenant shall not burn or cause or permit any odours or smells to be produced or to permeate or emanate from the Premises which are in the Landlord’s opinion offensive or unusual. The Tenant shall take necessary measures to ensure proper ventilation and to prevent smoke fumes or unpleasant odours and/or leakage of any substances or materials from and into the Premises and in the event that the Tenant fails to do so the Landlord may without prior notice to the Tenant take all such measures as it deems necessary to remedy this breach and all costs and expenses incurred by the Landlord shall be solely borne by the Tenant and paid forthwith. All such costs and expenses so incurred by the Landlord together with interest from the date of expenditure until the date they are paid by the Tenant to the Landlord shall be recoverable from the Tenant as if they were rent in arrears.

3.33   No Animals: The Tenant shall not keep, permit or suffer to be kept any animals, fishes, reptiles, birds, insects, pests, vermin or other livestock whatsoever in or about the Premises and shall take all reasonable precautions to keep the Premises free of rodents, insects and other pests.

3.34   Signs and Advertisements:

(a)	The Tenant shall not affix, paint, attach or otherwise exhibit or permit or suffer so to be upon any part of the Premises any new sign, device, furnishing, ornament, announcement, placard, poster, light, display, advertisement, nameplate, flag, flag pole, or any other object unless approved in writing by the Landlord and at such location as shall be approved by the Landlord. The Tenant shall obtain at its own cost and expense all approvals, permits and licences from the Authorities for the display of any nameplate or signboard approved by the Landlord. In this respect, the Landlord shall assist the Tenant in the submission and application by endorsing on such plans previously approved by the Landlord and all costs and expenses, if any, shall be borne by the Tenant. All installation costs and the electricity costs in respect of any nameplate or signboard shall be borne solely by the Tenant. Provided Always that any approval given by the Landlord pursuant to this Clause 3.34 may at the sole discretion of the Landlord be subsequently withdrawn, modified or varied.
(b)	The Tenant shall not erect or install any sign, device, furnishing, ornament or object which is visible from the street or from any other building and which, in the opinion of the Landlord is incongruous or unsightly or may detract from the appearance of the Premises.
(c)	Upon written request of the Landlord, the Tenant shall immediately remove anything it may have done in contravention of this Clause 3.34.

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(d) If the Tenant shall fail to comply with the Landlord’s written request under Clause 3.34(c), the Landlord may in addition to any other remedy available to it enter upon the Premises and do such acts and things as may be required to remedy such breach at the Tenant’s expense without being liable to the Tenant for loss.

3.35   No Adverse Publicity:  The Tenant shall not advertise the Tenant’s business or participate in any form of publicity or promotion which the Landlord in its absolute discretion considers detrimental to the Property and/or the reputation of the Landlord.

3.36   Not to Assign:  The Tenant will not at any time during the continuance of this Tenancy Agreement assign, sublet, underlet, licence or otherwise share or part with possession or use of the Premises or otherwise deal with or dispose of the Premises or any part thereof unless the Landlord has given its prior written approval thereto. In the event of a breach of this Clause 3.36, the Landlord may at its absolute discretion terminate this Tenancy Agreement whereupon the Tenant shall forthwith surrender the Premises with vacant possession without prejudice to the rights of the Landlord in respect of any antecedent breach.

3.37   Change of Address:  The Tenant shall advise the Landlord in writing of any change in the address or registered office of the Tenant within seven (7) days of such change.

3.38   GST: The Tenant shall pay any tax levied on the supply of goods and services or such taxes, or impositions by whatever name called, levied or imposed by the appropriate government authority on the Rent, Service Charge and such other monies as are required to be paid under this Tenancy Agreement or under any statutory law during the Term.

3.39   Sanitary and Plumbing Facilities:  All costs and expenses incurred by the Landlord in connection with or in respect of plumbing works done in the Premises shall be borne by the Tenant and paid forthwith upon notice from the Landlord to the Tenant. All cost and expenses so incurred by the Landlord together with interest from the date of expenditure until the date they are paid by the Tenant shall be recoverable from the Tenant as if they were rent in arrears.

3.40   Compliance with Immigration Act:   The Tenant shall not use the Premises as a place in which any person is employed or occupies in contravention of Section 57(1 )(e) of the Immigration Act (Chapter 133, Singapore) and shall indemnify the Landlord against all costs, claims, liabilities, fines or expenses whatsoever which may fall upon the Landlord by reason of any non-compliance thereof.

3.41   Financial Statements:    The Tenant shall arrange at the Tenant’s expense and submit to the Landlord copies of its audited annual Financial Statements and the report of its auditors as soon as available and in any event within one hundred and twenty (120) days after the close of every financial year of the Tenant (beginning with the current one).

4.      The Landlord’s Covenants

The Landlord hereby covenants with the Tenant as follows:

4.1   Quiet Enjoyment:    That the Tenant, duly paying the Rent and any other charges hereby reserved and observing and performing the several covenants and stipulations herein contained on the Tenants’ part to be observed and performed, shall peaceably hold and have quiet possession and enjoyment of the Premises during the Term without any disturbance by the Landlord or any person lawfully claiming under or in trust for the Landlord except as provided in this Tenancy Agreement.

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4.2    Insurance of the Property:  The Landlord shall at all times have the sole discretion as to whether to take out and maintain additional insurance in respect of the Property at the Landlord’s own cost and expense.

4.3    Rates, Taxes And Outgoings:  The Landlord shall pay all present and future rates, taxes, assessments, impositions and outgoings (including land rental) throughout the Term imposed upon or in respect of the Property or any part thereof save, except such as are herein agreed to be paid by the Tenant.

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5.       Rights Reserved By The Landlord

PROVIDED ALWAYS AND IT IS HEREBY AGREED AND DECLARED as follows:

5.1     Right of Re-Entry: If:

(a)	the Rent hereby reserved or any part thereof or any Interest payable thereon or any other monies payable under this Tenancy Agreement shall at any time be unpaid for fourteen (14) days after the same shall have become due (whether formally demanded or not); or
(b)	any covenant on the Tenant’s part herein contained shall not be performed or observed; or
(c)	the Tenant being a company shall go into liquidation whether voluntarily (save for the purpose of amalgamation or reconstruction) or compulsorily or a receiver shall be appointed of its undertaking, property or assets; or
(d)	the Tenant shall make any arrangement with creditors for liquidation of its debts by composition or otherwise or if a judicial manager is appointed over the Tenant; or
(e)	any execution or attachment shall be levied upon or issued against any of the property or assets of the Tenant,

then in any one of the said events it shall be lawful for the Landlord at any time thereafter to re-enter upon the Premises or any part thereof in the name of the whole and thereupon the Term shall forthwith and absolutely cease and determine but without prejudice to the right of action of the Landlord in respect of any arrears of the Rent or of any antecedent breach of the Tenant’s covenants herein contained and without prejudice to any other rights or remedies of the Landlord, the Tenant shall also pay to the Landlord compensation and damages for the loss of Rent suffered by the Landlord consequential upon the Landlord exercising its rights of re-entry.

5.2      Penalty for Non-Payment:    In addition and without prejudice to any other right, power or remedy of the Landlord if the Rent and Service Charge hereby reserved or any part thereof or any monies payable by the Tenant to the Landlord in connection with the tenancy herein shall at any time remain unpaid for fourteen (14) days after the same shall have become due (whether any formal demand therefor shall have been made or not) then the Tenant shall pay to the Landlord penalty at the interest rate of twelve per cent (12%) commencing on the date on which such monies fall due for payment up to the date on which such monies are actually paid to the Landlord. The Landlord shall be entitled to recover any monies payable by the Tenant to the Landlord in connection with this Tenancy Agreement and such penalty on the Rent and/or such monies payable as aforesaid as if such monies payable and such penalty were rent in arrears.

5.3      Rights Against the Tenant’s Goods:

(a) Notwithstanding anything herein contained if this Tenancy Agreement shall come to an end whether by effluxion of time or otherwise and the Tenant shall within seven (7) days thereafter fail to remove all its goods whether belonging to the Tenant or otherwise (which expression shall include personal property of every description save for property and goods belonging to the Landlord) from the Premises or if the Tenant shall abandon the Premises (and the Tenant shall be deemed to have abandoned the Premises and terminated this Tenancy Agreement unilaterally if the Tenant without the consent in writing of the Landlord

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fails to open the Premises for a continuous period of seven (7) days) then and in any of the said events it shall be lawful for the Landlord to repossess the Premises for the purpose of mitigating damages and to sell or otherwise dispose of the said goods in the Premises at such time and at such price as the Landlord shall in its absolute discretion think fit without prejudice to all other rights and remedies of the Landlord. The Landlord shall after payment out of the proceeds of sale of the costs and expenses connected with the said sale apply the net proceeds of sale towards payment of all arrears of Rent and the interest thereon and all other sums of monies due and payable by the Tenant to the Landlord under this Tenancy Agreement and the balance (if any) thereof shall be retained by the Landlord. For the purpose of this Clause, goods shall include all fixtures and fittings of the Tenant.

(b)

The Tenant hereby unconditionally and irrevocably agrees to indemnify the Landlord against any liability incurred by the Landlord to any third party whose property is dealt with or disposed of by the Landlord in the mistaken belief (which will be presumed unless the contrary is proved) that such property belonged to the Tenant.

5.4    Option to Renew:

(a)	If:
	(i)	the Tenant gives a written request to the Landlord, not later than six (6) months before the expiry date of the Term (time being of the essence), that it requires an extension of the tenancy hereby created for a further term; and
	(ii)	at and if there shall not at the time of such request or at the time of renewal be any existing breach or non-observance of any of the covenants on the part of the Tenant herein contained,
	the Landlord shall at the Tenant’s expense grant to the Tenant the Renewal Term, conditional upon and subject to (A) consent of the Head Lessor under the Head Lease for the renewal of the Tenancy Agreement of the Property, and (B) the revised rent and such other terms and conditions as may be prescribed by the Landlord at its absolute discretion in respect of the Tenancy Agreement for the Renewal Term.
(b)	If after the new document for the Renewal Term has been signed but before commencement of the Renewal Term, the Tenant is in default of the provisions of this Tenancy Agreement, the Landlord is entitled to terminate the agreement for the Renewal Term by giving notice to the Tenant. Upon receipt of the notice, the Renewal Term will be terminated without affecting the other rights of the Landlord against the Tenant in respect of the default. The Landlord will not be liable for any loss, damage, cost, expense or compensation in connection with the termination.
(c)	The Tenant shall pay for (i) all fees payable to the Head Lessor in connection with the application for and grant of consent of the Head Lessor to the renewal of the Tenancy Agreement of the Premises; and (ii) stamp duty on the Tenancy Agreement (in duplicate) for the Renewal Term.
5.5	Power of The Landlord to Deal with Adjoining Property and the Premises:
(a)	The Landlord may deal as it may think fit with other property belonging to the Landlord adjoining or nearby and may erect or suffer to be erected on such

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	property any buildings whatsoever whether or not such buildings shall affect or diminish the light or air which may now or at any time be enjoyed by the Tenant in respect of the Premises.
(b)	The Landlord shall have the right at all times without obtaining any consent from the Tenant to develop the vacant land on the Property (if any) and to alter, reconstruct or modify in any way whatsoever any parts of the Building, so long as means of access to and egress from the Premises are possible and such development does not unreasonably interfere with the Tenant’s operations.
(c)	For the avoidance of doubt, any such development or addition or alteration shall not reduce the Rent payable under this Tenancy Agreement. The Landlord shall have the absolute right to Tenancy Agreement out any new space created.

5.6     Rights To Alter Building: The Landlord shall have the right to deal with the Property or any part thereof if it is so required by the Authorities notwithstanding that the same may interfere with, disturb, interrupt or affect the Tenant’s peaceful and quiet enjoyment of the Premises or diminish the access of light and air enjoyed by the Premises or impede the ingress to and egress from the Premises and the Tenant shall not have any claim against the Landlord and the Landlord shall not be liable to the Tenant in any manner whatsoever for any damages or expenses whatsoever incurred by the Tenant as a result thereof.

5.7     No Representations: This Tenancy Agreement shall in no way be modified by any oral discussions which may have preceded the signing of this Tenancy Agreement. The Landlord shall not be bound by any oral representations or oral promises with respect to the Property or in respect of the Premises, except as expressly set forth in this Tenancy Agreement with the object and intention that the whole of the agreement between the Landlord and the Tenant shall be set forth herein, subject however to any variations or modifications to the terms of this Tenancy Agreement which are expressly agreed in writing by the parties hereto on or after the date of this Tenancy Agreement, as supplements to this Tenancy Agreement. The Landlord does not expressly or impliedly warrant that the Property will remain suitable or adequate for all or any of the purposes of the Tenant notwithstanding that permitted use of the Property is set out in this Tenancy Agreement and all warranties (if any) as to suitability and adequacy of the Property implied by law are hereby expressly negatived.

5.8     Damage To Building: In the event that the Building or any part thereof shall be damaged or destroyed by fire, flood, tempest, explosion, storm, lightning, act of God or other cause beyond the control of the Landlord so as to render the Premises or any part thereof substantially unfit for occupation and use then the Landlord may in its absolute discretion decide that it will rebuild or reinstate or make fit for occupation the Premises and in such event the Landlord shall within ninety (90) days after such damage has been sustained give notice in writing to the Tenant of its decision and may in its discretion terminate this Tenancy Agreement and thereupon the Tenant shall if still in occupation vacate the Premises without compensation from the Landlord. In the case of damage caused aforesaid the Tenant shall have no claim against the Landlord for delay howsoever caused in the repairing and/or rebuilding of the Premises or the Building or any part thereof and nothing herein contained or implied shall be deemed to impose any obligations upon the Landlord to rebuild or reinstate or make fit for occupation the Building, provided that in the event that such damage or destruction has been caused by the act or default of the Tenant, its servants, independent contractors, agents, visitors, invitees or licensees, the Tenant shall be liable to the Landlord for any loss, damage, cost and expense suffered by the Landlord as a result thereof.

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5.9      Costs of Improvements: If the Landlord shall at any time during the Term effect any structural alterations or any alterations or additions to the water, gas, electrical, plumbing or fire equipment or other services or appurtenances to the Premises which may be required by reason of any future statute, regulation, ordinance or by-law of the Authorities arising from or relating to the Tenant’s use or requirements, then the cost of such improvements with interest to be calculated at the time payments are due shall be paid by the Tenant to the Landlord, Provided that the Tenant is duly informed of the aforesaid works and the costs in respect thereof before the Landlord commences any such works.

5.10     Use of Premises at Risk of the Tenant: The use and occupation and possession of the Premises is at the risk of the Tenant and the Tenant hereby releases to the full extent permitted by the law the Landlord, its agents, servants, contractors, licensees and invitees from all claims and demands of every kind in respect of or resulting from any accident, damage or injury occurring in the Premises and the Landlord shall have no responsibility or liability for any loss, damage or injury suffered by the Tenant whether to or in respect of the Tenant’s person or property or the business conducted by the Tenant as a result of any breakage, leakage, accident, happening, occurrence or event in the Premises.

5.11     The Landlord Not Liable: Notwithstanding anything herein contained the Landlord shall not be liable to the Tenant, nor shall the Tenant have any claim against the Landlord and/or the Landlord’s agents, servants, employees or contractors in respect of:

(a)	any failure or inability of or delay by the Landlord and/or the Landlord’s agents, servants, employees or contractors in fulfilling any of its obligations under this Tenancy Agreement or any interruption in any of the services provided by the Landlord and/or the Landlord’s agents, servants, employees or contractors by reason of necessary repair or maintenance of any installations or apparatus or damage thereto or destruction thereof or by reason of mechanical or other defect or breakdown or by reason of any events or circumstances beyond the control of the Landlord and/or the Landlord’s agents, servants, employees or contractors (including but not limited to fire, flood, act of God, force majeure, escape of water, riot, civil commotion, curfew, emergency, labour disputes, shortage of manpower, fuel, materials, electricity or water and/or any acts, restrictions, regulations, by-laws, prohibitions or measures of any kind on the part of any government authorities); or
(b)	any act, omission, default, misconduct or negligence of any porter, attendant or other servant or employee, independent contractor or agent of the Landlord in or about the performance or purported performance of any duty relating to the provision of the services or any of them as provided by the Landlord; or
(c)	any act, omission, default, misconduct or negligence of any contractor nominated or approved by the Landlord and any such contractor appointed by the Tenant shall not be deemed to be an agent or employee of the Landlord; or
(d)	any damage, injury or loss arising out of the leakage or defect of the piping, wiring and sprinkler system in the Premises and/or the structure of the Premises; or
(e)	any damage, injury or loss caused by other tenants or persons in the Premises; or
Sub-paragraphs (a), (b) and (e) of this Clause 5.11 shall apply for a case of negligence as well as to any other cause(s) howsoever arising.

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5.12   The Landlord’s Right to Exhibit Notice and Prospective Tenants to Inspect: Except where the Tenant is granted an option to renew for the Renewal Term and the Tenant exercises such option pursuant to Clause 5.4, the Landlord have the unqualified and irrevocable right six (6) months preceding the expiration of the Term to exhibit where the Landlord shall think fit a notice indicating that the Premises will be vacant and will be available for letting which notice the Tenant shall not remove or conceal and to allow the Landlord or a representative of the Landlord at all reasonable times during the aforesaid six (6) months to view the Premises with prospective tenants or occupiers.

5.13   Signs and Advertisements: The Landlord shall have the right to erect any signs, placards, posters, lights, displays or advertisements at such location and in such manner and for such length of time as the Landlord shall in its sole discretion deem appropriate.

5.14   Government Acquisition: If:

(a)	the Property is acquired by any relevant authority: or
(b)	a notice, order or gazette notification is issued, made or published in respect of the intended or actual acquisition of the Property by any relevant authority,

the Landlord may terminate this Tenancy Agreement by giving written notice to the Tenant. On the said expiry date of such notice, this Tenancy Agreement will end without affecting the rights of the Landlord against the Tenant for any previous default by the Tenant arising out of or in connection with this Tenancy Agreement, and without the Landlord being liable for any inconvenience, loss, damage, cost, expense or compensation in connection with the termination of this Tenancy Agreement pursuant to this Clause 5.14.

5.15   Termination of Head Lease Term by Head Lessor:

(a)	If the Head Lessor, at any time before the expiry of the Head Lease Term:
	(i)	terminates the lease granted to the Landlord under the Head Lease, and in connection therewith, gives notice in writing thereof to the Landlord (Head Lease Termination Notice);
	(ii)	notifies the Landlord of the revocation of its consent to the Tenancy Agreement (Revocation Notice); or
	(iii)	becomes entitled to and re-enters the Property or any part thereof in the name of the whole, or
(b)	if upon the expiration of the initial leasehold term of 30 years under the Head Lease, the Head Lessor does not grant the further term of 30 years from the expiry of the said initial leasehold term,

the Landlord shall, upon the Landlord’s receipt of the Head Lease Termination Notice or the Revocation Notice or upon the Landlord becoming aware of Head Lessor’s intention to re-enter the Property or upon the Landlord becoming aware of Head Lessor’s intention not to grant the further term of 30 years from the expiry of the initial leasehold term of 30 years under the Head Lease, give written notice thereof to the Tenant. On (i) the expiry date of the Head Lease Termination Notice or (ii) the expiry date of the Revocation Notice or (iii) the date of Head Lessor’s re-entry into the Property or (iv) the expiry of the initial leasehold term of 30 years under the Head Lease, whichever date is the earliest, the Term and this Tenancy Agreement will end without affecting the rights of the Landlord against the Tenant for any previous default by the Tenant arising out of or in connection

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with this Tenancy Agreement, and without the Head Lessor or the Landlord being liable for any inconvenience, loss, damage, cost, expense or compensation in connection with the termination of this Tenancy Agreement pursuant to this Clause 5.15.

5.16   Landlord May Assign:

(a)	The Landlord may assign or charge all of its rights and benefits under this Tenancy Agreement to any lender of the Landlord or any mortgagee of the Property.
(b)	The Tenant acknowledges that the Landlord’s rights and benefits under this Tenancy Agreement must accrue to the owner for the time being of the Property and that:
	(i)	the Landlord shall be entitled to assign or transfer its rights and benefits under this Tenancy Agreement to any trustee for the time being of REIT; and
	(ii)	on any disposal of the Property by any owner of the Property (including, without limitation, the Landlord or any trustee for the time being of REIT, such owner shall be entitled to, assign or transfer its rights and benefits under this Tenancy Agreement to any subsequent purchaser(s) of the Property.
(c)	Upon such assignment or transfer, the Tenant:
	(i)	is treated to have consented to such assignment or transfer;
	(ii)	must accept any transferee of the Landlord as its new Landlord;
	(iii)	must release the Landlord from all its obligations in this Tenancy Agreement, particularly, the Landlord’s obligation to refund the Security Deposit and other sums under this Tenancy Agreement upon transfer (less any authorized deductions) of such Security Deposit to the transferee; and
	(iv)	must become a party to and sign any agreement with the Landlord and its transferee relating to the said assignment or transfer, if required by the Landlord. Such agreement will be prepared by the Landlord at its own cost and expense.

5.17      The Landlord Not a Partner: The Landlord shall not in any way or for any purpose be construed as a partner or being in joint venture with the Tenant and the provisions herein relating to additional rent (if any) are solely to provide a method of computing rent and shall not create any relationship between the parties other than that of Landlord and Tenant.

5.18      Waivers and Extension of Time: Any indulgence or extension of time granted by the Landlord to the Tenant and/or any oversight by the Landlord shall not operate as a waiver of the Landlord’s rights hereunder in respect of any continuing or subsequent default, breach or non-observance or non-performance of the Tenant’s covenants and conditions herein contained or so as to defeat or affect in any way the rights of the Landlord herein in respect of any such continuing or subsequent default, breach or non- observance or non-performance. Any consent given by the Landlord shall operate as a consent only for the particular matter to which it relates and shall in no way operate as a waiver or release of any of the provisions hereof, nor shall it be construed as dispensing with the necessity of obtaining the specific written consent of the Landlord in future,

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unless expressly so extended. The acceptance of rent or any other monthly charges or fees (if any) or any other sums payable by the Tenant to the Landlord shall not be deemed to operate as a waiver by the Landlord of any right to proceed against the Tenant in respect of a breach by the Tenant of any of the Tenant’s obligations contained herein.

5.19      Performance at the Tenant’s Own Cost and Expense: The Tenant shall perform and observe all the Tenant’s covenants, conditions, terms, obligations and stipulations in connection with this Tenancy Agreement at its own cost and expense.

5.20      Pre-Termination of Tenancy Agreement: Without prejudice to the rights of the Landlord at law and in equity, in the event the Tenant purports to terminate this Tenancy Agreement for any reason prior to expiry of the Term, the Landlord shall be entitled to receive from the Tenant forthwith in one lump sum the amount equivalent to the aggregate Rent for the whole Term less any Rent actually received by the Landlord at the time of the purported termination of the Tenancy Agreement by the Tenant, Provided nothing herein shall be construed to impose or imply any obligation on the Landlord to accept the Tenant’s purported termination of this Tenancy Agreement.

5.21      Severability: If any one or more of the provisions contained in this Tenancy Agreement or part thereof shall be deemed invalid, unlawful or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions (or part thereof as the case may be) contained herein shall not in any way be affected or impaired.

5.22      Registration of Tenancy Agreement and Subdivision: The Tenant shall not at any time, register the Tenancy Agreement hereby created under this Tenancy Agreement at the Singapore Land Authority or at any other Registry in Singapore, or require the Landlord to subdivide the Property or any part thereof or to do any act or thing which could result in the Landlord being required to subdivide the Property or any part thereof.

5.23      Tenancy Agreement to Prevail: Where the covenants, conditions, terms, obligations, stipulations and powers contained in or subsisting in connection with this Tenancy Agreement are inconsistent with or contradictory to those contained in or subsisting under any other document where applicable, the covenants, conditions, terms, obligations, stipulations and powers contained in or subsisting in connection with this Tenancy Agreement shall prevail and have full force and effect.

5.24      Representations & Warranties: The Tenant hereby represents and warrants for the benefit of the Landlord that:

(a)	it has full power and authority to enter into, exercise its rights and perform and comply with its obligations (where applicable) under this Tenancy Agreement, and all transactions arising from and in connection to the same and this Tenancy Agreement constitutes legal valid binding and enforceable obligation on its part;
(b)	all actions, conditions and things required to be taken, fulfilled and done (including without limitation the obtaining of any necessary consents or licences or the making of any filing or registration) in order to (i) enable it lawfully to enter into, exercise its rights and perform and comply with its obligations (where applicable) under this Tenancy Agreement, and all transactions relating to the same; and (ii) ensure that those obligations which are legally binding and enforceable have been taken, fulfilled and done; and
(c)	its entry into, exercise of its rights and/or performance of or compliance with its obligations (where applicable) under this Tenancy Agreement, and all transactions

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relating to the same do not and will not violate, or exceed any power or restriction granted or imposed by:
(i)	any law, regulation, authorisation, directive or order (whether or not having the force of law) to which it is subject; or
(ii)	the memorandum and articles and constitutive documents of it; or
(iii)	any agreement to which it is a party or which is binding on it; or
(iv)	any order, judgement or decree of any court or any governmental department or the Authorities.

5.25   Third Party Rights: This Tenancy Agreement shall not create any right under the Contracts (Rights of Third Parties) Act (Chapter 53B), which is enforceable by any party who is not a party to this Tenancy Agreement.

5.26   Notices: All notices, demands or other communications required or permitted to be given or made hereunder shall be in writing and delivered personally or sent by prepaid post (by air-mail if to or from an address outside Singapore) with recorded delivery or facsimile address to the intended recipient thereof at its address set out in Schedule 2 or at its last known address or at its facsimile number set out in Schedule 2 (or to such other address or facsimile number as any party may from time to time duly notify in writing to the other). Any such notice, demand or communication shall be deemed to have been duly served (if given or made by facsimile) immediately or (if given or made by letter) 24 hours after posting or (if made or given to or from an address outside Singapore) 72 hours after posting and in proving the same it shall be sufficient to show that the envelope containing the same was duly addressed, stamped and posted. The initial addresses and facsimile numbers of the parties for the purposes of this Tenancy Agreement are specified in Schedule 2.

5.27   Governing Law: The validity, construction, interpretation and enforcement of this Tenancy Agreement and any document or agreement contemplated herein and all rights, remedies, powers, obligations and liabilities hereunder shall be governed by the Laws of the Republic of Singapore. The parties herein agree to submit to the jurisdiction of the courts of the Republic of Singapore.

5.28   Limitation of Liability: Notwithstanding any contrary provision in this Tenancy Agreement, the parties herein agree and acknowledge that the Landlord is entering into this Tenancy Agreement in its capacity as trustee of REIT and not in its personal capacity. As such, any liability of or indemnity given or to be given by the Landlord shall be limited to the assets of REIT over which the Landlord in its capacity as trustee has recourse.

5.29   Counterparts: This Tenancy Agreement may be executed in one or more counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart and each such counterpart shall constitute an original of this Tenancy Agreement but all the counterparts shall together constitute one and the same instrument.

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SCHEDULE 1

Interpretation

1.1      Interpretation:  In this Tenancy Agreement the following expressions shall have the following meanings assigned to them unless the contrary intention appears:

Act means the Land Titles (Strata) Act (Chapter 158);

Authorities means all relevant government authorities or statutory boards;

Car Park means that part of the Property designated from time to time by the Landlord to be used for the parking of motor vehicles;

Common Property means:

(i)	(if the Building is subdivided and registered under the Act) the parts of the Building which are within the definition of common property under the Act; or
(ii)	(if the Building is not subdivided and registered under the Act) the parts of the Building which would reasonably be treated as common parts of the Building for common use or benefit if the Building had been subdivided and registered under the Act;

Conducting Media means drains, sewers, conduits, flues, gutters, gullies, channels, ducts, shafts, watercourses, pipes, cables, wires and mains or any of them;

Financial Statements means the audited financial statements of the Tenant for the each of their financial year, which have been prepared, audited, examined, reported on and approved in accordance with accounting principles and practices generally accepted and consistently applied in Singapore and in accordance with the laws of Singapore and the Memorandum and Articles of Association of the Tenant;

Floor Area means the estimated floor area of the Premises specified in Item 6, which is measured to include:

(i)	half the thickness of the walls/partitions/glass (as may be the case) which form the external boundaries of the Premises; and
(ii)	the area occupied by all pillars, columns, mullions and projections within the Premises.

GST means the goods and services tax (which includes any imposition, duty or levy) chargeable under the Goods and Services Tax Act (Chapter 117A) or any statutory modification or re-enactment thereof;

HDB means Housing Development Board;

Head Lease means the Lease Agreement No. 23095 granted by the President of the Republic of Singapore and Lease Agreement No. IA/338968L granted by HDB and any reference in this Tenancy Agreement to the Head Lease includes that document as from time to time amended, modified or supplemented and any document which amends, modifies or supplements that document.;

Head Lease Term means the initial leasehold term of 30 years commencing from 1 February 1997 with a covenant by HDB to grant a further term of 30 years from the expiry

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of the initial leasehold term, subject to the fulfilment of the terms and conditions of the Head Lease;

Head Lease Termination Notice has the meaning ascribed to it under Clause 5.15(a)(i);

Head Lessor means the President of the Republic of Singapore and/or the HDB (as the case may be);

Interest means interest at the rate of twelve per cent (12%) per annum calculated on a daily basis of a 365-day year (as well before as after judgment);

Item means an item in Schedule 2;

Landlord includes the Landlord’s successors in title and assigns;

Original Condition means the bare state and original condition of the Premises as at the Possession Date (as hereinafter defined) without any fixtures, fittings, renovations, additions, alterations, improvements made or installed in the Premises by the Tenant or taken over by the Tenant, and includes the concrete topping, sprinklers and all fixtures and fittings originally provided by the Landlord;

Outstanding Debt means all sums which are or at any time may be or become due from or owing by the Tenant to the Landlord, whether as Security Deposit, Rent, Service Charge, GST, interest, penalty or otherwise, whether actually or contingently, which the Tenant has covenanted or is liable to pay or discharge, under or in connection with this Tenancy Agreement;

Possession Date means the date referred to in Clause 2.2;

Premises means the premises in the Building, described in Item 5 of Schedule 2, excluding the exterior faces of exterior walls, external faces of boundary walls and the roof;

Property means the property stated in Item 4 of Schedule 2;

Property Tax means the property tax payable by the Tenant in accordance with Schedule 5;

Reinstatement Period means the period of 1 month before the expiration or earlier determine of the term or such other period as the Landlord may in its absolute discretion agree;

REIT means the real estate investment trust known as Cambridge Industrial Trust, established in Singapore;

Renewal Term means the further term specified in Item 10 of Schedule 2;

Rent comprises the rent (exclusive of service charge) payable by the Tenant in accordance with Clause 3.1, and the applicable GST;

Rent Rate means the rent rate stated in Item 11(a) of Schedule 2;

Revocation Notice has the meaning ascribed to it under Clause 5.15(a)(ii);

S$ means the lawful currency of Singapore;

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Security Deposit means the amount stated in Item 8 of Schedule 2 payable by the Tenant to the Landlord as security deposit;

Service Charge means the service charge payable by the Tenant as stated in Item 11(c) of Schedule 2, and the applicable GST;

Tenancy Agreement means this Tenancy Agreement including the Schedules and Annexure hereto and any agreements supplemental to it;

Tenant includes, if the Tenant is an individual, his personal representatives and permitted assigns, or if the Tenant is a company, its successors in title and permitted assigns;

Term means the term of this Tenancy Agreement stated in Item 7 of Schedule 2;

Term Commencement Date means the commencement date of the Term, as stated in Item 7 of Schedule 2; and

Utilities means electricity, water, sewerage and telecommunications.

1.2	General:
(a)	Interpretation of restrictions on the Tenant: In any case where the Tenant is placed under a restriction by reason of the covenants and conditions contained in this Tenancy Agreement, the restriction shall be deemed to include the obligation on the Tenant not to permit or allow the infringement of the restriction by any person claiming rights to use, enjoy or visit the Property through, under or in trust for the Tenant.
(b)	Schedules and Annexures: The Schedules and Annexures hereto shall be taken, read and construed as parts of this Tenancy Agreement and the provisions thereof shall have the same force and effect as if expressly set out in the body of this Tenancy Agreement.
(c)	Clause and paragraph headings: The clause and paragraph headings in this Tenancy Agreement are inserted for ease of reference only and shall not be taken into account in the construction or interpretation of any covenant, condition or proviso to which they refer.
	References in this Tenancy Agreement to a clause or Schedule or Annexure are references where the context so admits to a clause or Schedule or Annexure in this Tenancy Agreement. References in a clause to a paragraph are (unless the context otherwise requires) references to a paragraph of that clause, and references in a Schedule or Annexure to a paragraph are (unless the context otherwise requires) references to a paragraph of that Schedule or Annexure.
(d)	Singular and plural meanings: Words in this Tenancy Agreement importing the singular meaning shall where the context so admits include the plural meaning and vice versa.
(e)	Statutes and statutory instruments: References in this Tenancy Agreement to any statutes or statutory instruments shall include and refer to any statute or statutory instrument amending, consolidating or replacing them respectively from time to time and for the time being in force.
(f)	Gender: Words in this Tenancy Agreement for the masculine gender shall include the feminine and neuter genders and vice versa and words denoting

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	natural persons shall include corporations and firms and all such words shall be construed interchangeably in that manner.
(g)	Joint and several obligations: Where two or more persons are included in the term Tenant, all covenants, agreements, terms, conditions and restrictions shall be binding on and applicable to them jointly and each of them severally, and shall be binding on and applicable to their personal representatives and permitted assigns respectively jointly and severally.

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SCHEDULE 2

TERMS AND PARTICULARS OF RENT

1.	Date
				04 APR 2013
2.	Landlord
	Name	:	RBC INVESTOR SERVICES TRUST SINGAPORE LIMITED in its capacity as trustee of Cambridge Industrial Trust
	Company Registration No.	:	199504677Z
	Country of Incorporation	:	Singapore
	Registered Office Address	:	20 Cecil Street, #28-01, Equity Plaza, Singapore 049705
	Facsimile No	:	6536 7566
3.	Tenant
	Name	:	Cyberoptics (Singapore) Private Limited
	Company Registration No.	:	200103162D
	Country of Incorporation	:	Singapore
	Registered Office Address	:	21 Ubi Road 1 #02-01
			Singapore 408724
	Facsimile No	:	6844 5331
4.	Property
	Address	:	21 Ubi Road 1
			Singapore 408724
	Name	:	such name as may be decided by the Landlord and approved by the relevant authorities
5.	Premises
	Building Level	:	Level 2
	Unit No(s).	:	#02-01
	Demarcation	:	(for purpose of identification only) edged in red on the attached plan marked Annexure A
6.	Floor Area	:	Unit No		Area (subject to survey)
			#02-01		20,000 square feet

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7.	Term
	3 years from 25 July 2013 to 24 July 2016
8.	Security Deposit Amount
	Sum of S$184,000.00 equivalent to 4 months’ Rent and Service Charge based on the 3rd year Rent and Service Charge.
9.	Permitted Use
	Assembly of electronics inspection machines, storage of high-tech automated optical equipment with office.
10	Renewal Term
	Option to renew for another 3 years from 25 July 2016 to 24 July 2019, based on prevailing market rates.
11.	Rent and Service Charge (Excluding GST) : (With air-conditioning)

		Year 1	Year 2	Year 3
(a)	Rent Rate (per square foot per month)	S$1.50	S$1.60	S$1.70
(b)	Monthly Rent (per month)	S$30,000.00	S$32,000.00	S$34,000.00
(c)	Service Charge (per square foot per month)	S$0.60	S$0.60	S$0.60
(e)	Monthly Service Charge (per month)	S$12,000.00	S$12,000.00	S$12,000.00
(f)	Total Monthly Rent and Service Charge (per month)	S$42,000.00	S$44,000.00	S$46,000.00

12.	Floor Loading
	12.5 kN/m2
13.	Any Other Terms and Conditions
(a)	Tenant shall pay HDB sublet fees for the lease period.
(b)	Tenant to pay monthly rent via GIRO.
(c)	Landlord will allocate 4 complimentary carpark lots and 5 carpark lots will be chargeable at S$120.00 per lot per month (subject to GST) for the lease period. Landlord reserves the right to change the allocated lot location (if required).
(d)	In the event that the current carpark for the Premises is converted to ERP system, CIT will inform tenants in advance to liaise with the carpark operator directly on the allotment of carpark lots.

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(e)	Tenant shall pay S$150.00 per month (subject to GST) and is required to make one-time payment of S$5,778.00 (includes GST) for the installation of their company’s signage on the parapet wall. Tenant shall be required to make good to the parapet wall as part of their reinstatement works at the expiry of their tenancy period.
(f)	Air-conditioning will only be supply from 0900 to 1800 (Mondays to Fridays, excluding Public Holidays). Tenant is required to submit their request to the Landlord in advance should they require air-conditioning on weekend or public holiday (which will be chargeable at a nominal fee and the fees will be advised by Landlord in due course).
(g)	Tenant shall reinstate the unit to bare condition upon expiry of the lease period.
(h)	During the lease term for #02-01 from 25 July 2013 to 24 July 2016, the Landlord will offer a first right of refusal to Cyberoptics (Singapore) Private Limited to lease #02-02 upon availability of the unit.
	Upon notice by the Landlord on the availability of #02-02, the Tenant must give a written confirmation to the Landlord not later than one (1) week that it will take up a lease for #0202 and execute the tenancy agreement for #02-02 within two (2) weeks, failing which the offer to lease the #02-02 will lapse and we will release the unit for marketing.

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SCHEDULE 3

Scope For Property Management And Maintenance Service

1.	To keep the Premises and the Landlord’s fixtures and fittings therein including without limiting the generality of the foregoing, all doors, locks, window frames, window glass, window fittings, floors, interior plaster and other finishing materials and rendering to walls and ceiling, drainage, water and other pipes and sanitary water, gas and electrical apparatus and wiring, air-conditioning and other installations from the points where the supplies enter into meters that may serve the Premises in good clean tenantable substantial and proper repair and condition (fair wear and tear alone excepted) and to so maintain the same at the expense of the Tenant and not to substitute or replace any external window of the Building but upon any window becoming damaged, broken or defective to give notice to the Landlord.
2.	The Tenant particularly agrees:
	(a)	to reimburse the Landlord the cost of replacing all windows broken or damaged by the negligence of the Tenant or its employees, customers, invitees or licensees;
	(b)	to preserve and protect the fire detection and fire fighting installations provided by the Landlord within the Premises against possible damage or unauthorised interference and to indemnify the Landlord against all costs claims and damages arising from all damage thereto;
	(c)	to be wholly responsible for any damage or injury caused to any other person whomsoever directly or indirectly through the defective or damaged condition of any part of the Premises and to make good the same by payment or otherwise and to indemnify the Landlord against all costs, claims, demands, actions, liabilities and legal proceedings whatsoever made upon the Landlord by any person in respect thereof;
	(d)	to make good to the satisfaction of the Landlord any damage or breakage caused to any part of the Premises and/or the Building and/or to the Landlord’s fixtures and fittings by the transportation of the Tenant’s goods or effects or as a consequence of any neglect or malicious act or default of the Tenant its employees or invitees.
3.	Waste collection service: All waste disposals from the property, be it the Tenant’s or the sub-Tenants’ refuse, shall strictly follow the guidelines set by the Environment Public Health Act.
4.	Pest control service: The Tenant shall regularly examine and exterminate all pests including and not limited to rodents, cockroaches, ants and termites in the Property at least once a month.
5.	Other periodic property maintenance programs:
	(a)	Ensure good up keeping of signage(s) and renewal of the relevant certificate(s).
	(b)	The windows and doors are regularly painted and kept in a good state of repair.

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(c)	The Premises is kept clean and free from scribbling or drawings on walls, floors or ceilings.
(d)	Adequate ventilation and lighting are provided in all common and circulation areas and lifts, and any blown fuses, bulbs or defective wires and switches are immediately replaced.
(e)	Roofing and gutters, when damaged, are to be repaired as soon as possible.
(f)	All drawings are to be kept at the maintenance department at all times. This is to ensure proper control of the building services records.

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SCHEDULE 4

Prohibited Material / Items / Activities On The Premises, Building Or Property
(For The Purpose Of Shariah Compliance)

The manufacturing (including without limitation printing and publication), assembly and storage of following:

• Conventional banking, conventional retail finance, conventional insurance and conventional stockbrokerage business;

• Alcoholic beverages;

• Beverages containing alcohol, regardless of % content;

• Food containing alcohol, regardless of % content;

• Pornography, lewd and sexually suggestive materials;

• Food containing pork, lard and any produce derived from pigs, regardless of % content;

• Consumable food related by-product and food related ingredients or enhancer containing produce derived from pigs, regardless of content;

• Cosmetics, perfumery and other forms of beauty enhancer applied externally or otherwise, which contain alcohol, regardless of % content;

• Any gadget, device or mechanism of any description, the primary purpose of which is to enable user to engage in any game of wager or gambling, regardless of motive behind such engagement;

• Weaponry, ammunition or other device, gadget or mechanism of any description, the primary purpose of utilisation is capable of inflicting bodily harm to humans and may depending on severity of application, result in death to humans; and

• Cigarette, cigar and any other device or gadget, the net of effect of usage thereof is to, seek relaxation through exhalation of smoke after inhalation of substance deemed harmful to bodily health of humans.

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SCHEDULE 5

LIST OF LICENCES
(where applicable)

1.	Advertisement Licence;
2.	Vehicle Parking Certificate Parking Place Licence;
3.	Foodshop Licence;
4.	Dangerous Goods Licence;
5.	Flammable Materials Licence; and
6.	Any other requirements by Authorities, where such requirements are imposed due to the Tenant’s or Sub-Tenants’ use or requirements.

Tenancy Agreement – Cyberoptics (Singapore) Private Limited - Page 34

IN WITNESS WHEREOF, the parties herein have caused this Tenancy Agreement to be executed as a Deed and is intended to be, and is hereby delivered, on the day and year first abovewritten:

The Common Seal of	)
RBC INVESTOR SERVICES TRUST	)
SINGAPORE LIMITED	)
(in its capacity as trustee of	)
Cambridge Industrial Trust)	)
was affixed hereunto in the presence of:	)

Director
	Diana Senanayake

	Tan Kean Siew
	Authorised Signatory

The Common Seal of	)
CYBEROPTICS (SINGAPORE) PRIVATE LIMITED	)
was hereunto affixed in the presence of:	)
Director/Secretary	)

Name Jeff Bertelsen
Designation Vice President, CFO, Director IC No
Name Kathleen Iverson
Designation President, CEO, Chairman
IC NO

Tenancy Agreement – Cyberoptics (Singapore) Private Limited ‑ Page 35

ANNEXURE A

PLAN OF PREMISES

Tenancy Agreement – Cyberoptics (Singapore) Private Limited ‑ Page 36

EX-31.1

EXHIBIT 31.1

          I, Kathleen P. Iverson, certify that:

          1.     I have reviewed this Quarterly Report on Form 10-Q of CyberOptics Corporation.

          2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

          3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

          4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

          (a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          (b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          (c)          Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          (d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

          5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

          (a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

          (b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 13, 2013

/s/ Kathleen P. Iverson

Signature

Name: Kathleen P. Iverson

Title: Chief Executive Officer and Chair

26

EX-31.2

EXHIBIT 31.2

          I, Jeffrey A. Bertelsen, certify that:

          1.     I have reviewed this Quarterly Report on Form 10-Q of CyberOptics Corporation.

          2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

          3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

          4.     The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

          (a)          Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

          (b)          Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

          (c)         Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

          (d)          Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

          5.     The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

          (a)          All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

          (b)          Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 13, 2013

s/ Jeffrey A. Bertelsen

Signature

Name: Jeffrey A. Bertelsen

Title: Chief Financial Officer

27

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CyberOptics Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2013 as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), the undersigned, Kathleen P. Iverson, Chief Executive Officer, and Jeffrey A. Bertelsen, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
	1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
	2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Kathleen P. Iverson

Kathleen P. Iverson

Chief Executive Officer

May 13, 2013

/s/ Jeffrey A. Bertelsen

Jeffrey A. Bertelsen

Chief Financial Officer

May 13, 2013

END OF FILING

28

XML

Derivatives (Schedule Of Cash Flow Hedges) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Derivative Instruments, Gain (Loss) [Line Items]
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective Portion of Derivative	$ (139)	$ 323
Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income (Loss)	33	(75)
Ineffective Portion of Gain (Loss) on Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (Loss)
Cost Of Sales [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective Portion of Derivative	(87)	228
Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income (Loss)	25	(52)
Ineffective Portion of Gain (Loss) on Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (Loss)
Research And Development [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective Portion of Derivative	(30)	53
Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income (Loss)	5	(13)
Ineffective Portion of Gain (Loss) on Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (Loss)
Sales And Marketing [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Pretax Gain (Loss) Recognized in Other Comprehensive Income on Effective Portion of Derivative	(22)	42
Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income (Loss)	3	(10)
Ineffective Portion of Gain (Loss) on Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (Loss)

XML

Re-Organization And Restructure Charge (Narrative) (Details) (USD $)	3 Months Ended
	Dec. 31, 2012 employee	Sep. 30, 2012	Mar. 31, 2013 Workforce Reduction [Member]	Dec. 31, 2012 Workforce Reduction [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and severance costs	$ 523,000	$ 217,000
Reduction of workforce, percent	10.00%
Reduction of workforce, number of employees	20
Restructuring And Related Cost			$ 66,000	$ 192,000

XML

Intangible Assets (Narrative) (Details) (USD $)	Mar. 31, 2013
Intangible Assets [Abstract]
Amortization expense, remainder of 2013	$ 83,000
Amortization expense, 2014	65,000
Amortization expense, 2015	25,000
Amortization expense, 2016	$ 1,000

XML

Re-Organization And Restructure Charge (Summary Of Severance And Relocation Accruals) (Details) (USD $)	3 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Mar. 31, 2013 Workforce Reduction [Member]
Restructuring Cost and Reserve [Line Items]
Balance, January 1, 2013			$ 192,000
Cost incurred	523,000	217,000
Payments made			126,000
Balance, March 31, 2013			$ 66,000

XML

Inventories And Warranties (Schedule Of Changes In Estimated Warranty Liability) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Inventories And Warranties [Abstract]
Balance at beginning of period	$ 694	$ 985
Accrual for warranties	151	332
Settlements made during the period	(203)	(301)
Balance at end of period	$ 642	$ 1,016
Product warranties time frame, years	1 year

XML

Net Income (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2013

Net Income (Loss) Per Share [Abstract]

Schedule Of Net Income (Loss) Per Basic And Diluted Shares

(In thousands except per share amounts)	Net Loss		Weighted Average Shares Outstanding			Per Share Amount
Three Months Ended March 31, 2013:
Basic	$	(2,146)		6,961	$	(0.31)
Dilutive effect of common equivalent shares		—		—		—
Dilutive	$	(2,146)		6,961	$	(0.31)

(In thousands except per share amounts)	Net Income		Weighted Average Shares Outstanding			Per Share Amount
Three Months Ended March 31, 2012:
Basic	$	92		6,933	$	0.01
Dilutive effect of common equivalent shares		—		49		—
Dilutive	$	92		6,982	$	0.01

XML

Net Income (Loss) Per Share (Schedule Of Net Income Per Basic And Diluted Shares) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net Income (Loss) Per Share [Abstract]
Net income (loss)	$ (2,146)	$ 92
Weighted Average Shares Outstanding, Basic	6,961	6,933
Per Share Amount, Basic	$ (0.31)	$ 0.01
Weighted Average Shares Outstanding, Dilutive effect of common equivalent shares		49
Per Share Amount, Dilutive effect of common equivalent shares
Weighted Average Shares Outstanding, Dilutive	6,961	6,982
Per Share Amount, Dilutive	$ (0.31)	$ 0.01

XML

Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2013

Marketable Securities [Abstract]

Schedule Of Marketable Securities

	March 31, 2013
(In thousands)		Cost		Unrealized Gains		Unrealized Losses		Fair Value
Short-Term
U.S. government and agency obligations	$	7,577	$	13	$	(3)	$	7,587
Corporate debt securities and certificates of deposit		4,216		4		—		4,220
Marketable securities – short-term	$	11,793	$	17	$	(3)	$	11,807
Long-Term
U.S. government and agency obligations	$	7,964	$	20	$	—	$	7,984
Corporate debt securities and certificates of deposit		1,504		4		(1)		1,507
Asset backed securities		629		—		—		629
Equity security		42		3		—		45
Marketable securities – long-term	$	10,139	$	27	$	(1)	$	10,165

	December 31, 2012
(In thousands)		Cost		Unrealized Gains		Unrealized Losses		Fair Value
Short-Term
U.S. government and agency obligations	$	7,358	$	10	$	(35)	$	7,333
Corporate debt securities and certificates of deposit		4,100		5		—		4,105
Marketable securities – short-term	$	11,458	$	15	$	(35)	$	11,438
Long-Term
U.S. government and agency obligations	$	9,033	$	23	$	(23)	$	9,033
Corporate debt securities and certificates of deposit		1,192		4		(1)		1,195
Asset back securities		165		—		—		165
Equity security		42		—		—		42
Marketable securities – long-term	$	10,432	$	27	$	(24)	$	10,435

Schedule Of Marketable Securities Classified As Cash Equivalents

	March 31, 2013
(In thousands)		Cost		Unrealized Gains		Unrealized Losses		Recorded Basis
U.S. government and agency obligations	$	300	$	—	$	—	$	300
Corporate debt securities and certificates of deposit		755		—		—		755
	$	1,055	$	—	$	—	$	1,055

	December 31, 2012
(In thousands)		Cost		Unrealized Gains		Unrealized Losses		Recorded Basis
Corporate debt securities and certificates of deposit	$	2,824	$	—	$	—	$	2,824
	$	2,824	$	—	$	—	$	2,824

XML

Intangible Assets (Schedule Of Amortization Expense For Intangible Assets) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Intangible Assets [Abstract]
Patents	$ 34	$ 41

XML

Accounting For Stock-Based Compensation (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation expense	$ 103,000	$ 105,000
Unrecognized compensation cost related to non-vested equity based compensation	878,000
Unrecognized equity based compensation weighted average period, years	2 years 1 month 24 days
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation expense	66,000	64,000
Shares of common stock reserved for stock based benefits	1,044,307
Vesting period, years	4 years
Number of shares available for future issuance	462,287
Weighted average remaining contractual term, years	4 years 7 days
Aggregate intrinsic value for all options outstanding	143,815
Weighted average remaining contractual term for exercisable options, years	2 years 11 months 5 days
Aggregate intrinsic value of exercisable options	132,090
Stock Options [Member] | Contractual Term Seven Years [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration of stock options from date of grant, years	7 years
Stock Options [Member] | Contractual Term Ten Years [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration of stock options from date of grant, years	10 years
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation expense	12,000	15,000
Number of shares available for future issuance	166,582
Maximum contribution per plan year	6,500
Employees can purchase stock at the percentage rate of the lower of the market price on the first or last day of the offering period	85.00%
Employee Stock Purchase Plan [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payroll deduction for employee stock purchase plan percentage	1.00%
Employee Stock Purchase Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payroll deduction for employee stock purchase plan percentage	10.00%
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation expense	25,000	26,000
Vesting period, years	4 years
Aggregate intrinsic value for all options outstanding	$ 240,000
Restricted stock units to common stock ratio, shares entitled	1
Stock Grant Plan For Non-Employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares of common stock reserved for stock based benefits	30,000
Number of shares available for future issuance	11,000
Number of shares granted for non-employee directors upon re-election	1,000
Plan expiration date	May 19, 2018

XML

Marketable Securities (Schedule Of Marketable Securities Classified As Cash Equivalents) (Details) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Gain (Loss) on Investments [Line Items]
Cost	$ 1,055,000	$ 2,824,000
Unrealized Gains
Unrealized Losses
Recorded Basis	1,055,000	2,824,000
US States Government And Agency Obligations [Member]
Gain (Loss) on Investments [Line Items]
Cost	300,000
Recorded Basis	300,000
Corporate Debt Securities And Certificates Of Deposit [Member]
Gain (Loss) on Investments [Line Items]
Cost	755,000	2,824,000
Unrealized Gains
Unrealized Losses
Recorded Basis	$ 755,000	$ 2,824,000

XML

Significant Customers (Narrative) (Details)	3 Months Ended
	Mar. 31, 2013 customer	Mar. 31, 2012
Revenue, Major Customer [Line Items]
Revenue, export sales percentage	80.00%	87.00%
Number of major customers	2
Juki [Member]
Revenue, Major Customer [Line Items]
Major customers, total revenue percentage, less than 10%	8.00%
Assembleon [Member]
Revenue, Major Customer [Line Items]
Major customers, total revenue percentage	10.00%

XML

Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Income Taxes [Abstract]
Income tax provision (benefit)	$ 18	$ 35
Effective tax rate	(1.00%)	28.00%
Need for valuation allowance based on history of cumulative losses, years	3 years

XML

Inventories And Warranties (Schedule Of Changes In Deferred Warranty Revenue) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Inventories And Warranties [Abstract]
Balance at beginning of period	$ 582	$ 806
Revenue deferrals	94	46
Amortization of deferred revenue	(135)	(105)
Total deferred warranty revenue	541	747
Current portion of deferred warranty revenue	(361)	(482)
Long-term deferred warranty revenue	$ 180	$ 265	$ 146

XML

Derivatives

3 Months Ended

Mar. 31, 2013

Derivatives [Abstract]

Derivatives

3.  DERIVATIVES:

We enter into foreign exchange forward contracts to hedge against the effect of exchange rate fluctuations on cash flows denominated in foreign currencies associated with our subsidiary in Singapore. These transactions are designated as cash flow hedges. The effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. Hedge ineffectiveness and the amounts excluded from effectiveness testing recognized in income on cash flow hedges were not material for the three month periods ended March 31, 2013 and March 31, 2012.

The maximum length of time over which we hedge our exposure to the variability in future cash flows is 12 months. Accordingly, at March 31, 2013 and March 31, 2012, all of our open foreign exchange forward contracts had maturities of one year or less. The dollar equivalent gross notional amount of our foreign exchange forward contracts designated as cash flow hedges was approximately $7.2 million at March 31, 2013 and $10.8 million at March 31, 2012.

Reclassifications of amounts from accumulated other comprehensive income (loss) into earnings include accumulated gains (losses) at the time earnings are impacted by the forecasted transaction.  The location in the consolidated statements of operations and comprehensive income (loss) and amounts of gains and losses related to derivative instruments designated as cash flow hedges are as follows:

	Three Months Ended March 31, 2013
(In thousands)		Pretax Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Effective Portion of Derivative		Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income (Loss)		Ineffective Portion of Gain (Loss) on Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (Loss)
Cost of sales		$	(87)	$	25	$	—
Research and development			(30)		5		—
Sales and marketing			(22)		3		—
Total		$	(139)	$	33	$	—

	Three Months Ended March 31, 2012
(In thousands)		Pretax Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Effective Portion of Derivative		Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income (Loss)		Ineffective Portion of Gain (Loss) on Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (Loss)
Cost of sales		$	228	$	(52)	$	—
Research and development			53		(13)		—
Sales and marketing			42		(10)		—
Total		$	323	$	(75)	$	—

We expect to reclassify the March 31, 2013 pretax unrealized loss recorded in accumulated other comprehensive income (loss) of $5,000 to earnings over the next 12 months with the impact offset by cash flows from underlying hedged items.  The fair value of our foreign exchange forward contracts representing a loss in the amount of $8,000 as of March 31, 2013 has been recorded in accrued expenses.  The fair value of our foreign exchange forward contracts representing a gain in the amount of $153,000 as of December 31, 2012 has been recorded in other current assets.

Additional information with respect to the impact of derivative instruments on other comprehensive income (loss) is included in Note 12.  Additional information with respect to the fair value of derivative instruments is included in Note 4.

Our foreign exchange forward contracts contain credit risk to the extent that our bank counter-parties may be unable to meet the terms of the agreements.  We minimize such risk by limiting our counter-parties to major financial institutions.  We do not expect material losses as a result of defaults by other parties.

XML

Share Repurchase (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Disclosure of Repurchase Agreements [Abstract]
Stock repurchase program, Authorized amount		$ 3,000,000
Repurchase of common stock	186,000
Repurchase of common stock, shares	27,911
Amount available for additional share repurchases	$ 2,800,000

XML

Accounting For Stock-Based Compensation (Schedule Of Stock Option Activity) (Details) (USD $)	3 Months Ended
	Mar. 31, 2013
Accounting For Stock-Based Compensation [Abstract]
Options Outstanding, Outstanding, December 31, 2012	544,153
Options Outstanding, Exercised
Options Outstanding, Expired	(1,250)
Options Outstanding, Outstanding, March 31, 2013	542,903
Options Outstanding, Exercisable, March 31, 2013	326,239
Weighted-Average Exercise Price Per Share, Outstanding, December 31, 2012	$ 8.68
Weighted-Average Exercise Price Per Share, Exercised
Weighted-Average Exercise Price Per Share, Expired	$ 8.71
Weighted-Average Exercise Price Per Share, Outstanding, March 31, 2013	$ 8.68
Weighted-Average Exercise Price Per Share, Exercisable, March 31, 2013	$ 9.26

XML

Inventories And Warranties (Tables)

3 Months Ended

Mar. 31, 2013

Inventories And Warranties [Abstract]

Schedule Of Inventory Components

(In thousands)	March 31, 2013		December 31, 2012
Raw materials and purchased parts	$	7,451	$	8,152
Work in process		1,317		1,322
Finished goods		3,422		3,059
Total inventories	$	12,190	$	12,533

Schedule Of Changes In Estimated Warranty Liability

	Three Months Ended March 31,
(In thousands)	2013		2012
Balance at beginning of period	$	694	$	985
Accrual for warranties		151		332
Settlements made during the period		(203)		(301)
Balance at end of period	$	642	$	1,016

Schedule Of Changes In Deferred Warranty Revenue

	Three Months Ended March 31,
(In thousands)	2013		2012
Balance at beginning of period	$	582	$	806
Revenue deferrals		94		46
Amortization of deferred revenue		(135)		(105)
Total deferred warranty revenue		541		747
Current portion of deferred warranty revenue		(361)		(482)
Long-term deferred warranty revenue	$	180	$	265

XML

Accounting For Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2013

Accounting For Stock-Based Compensation [Abstract]

Schedule Of Stock Option Activity

	Options Outstanding		Weighted Average Exercise Price Per Share
Outstanding, December 31, 2012	544,153	$	8.68
Granted	—		—
Exercised	—		—
Expired	(1,250)		8.71
Forfeited	—		—
Outstanding, March 31, 2013	542,903	$	8.68
Exercisable, March 31, 2013	326,239	$	9.26

Schedule Of Non-Vested Restricted Stock Activity

Non-vested restricted stock units	Shares		Weighted Average Grant Date Fair Value
Non-vested at December 31, 2012	44,555	$	7.61
Granted	—		—
Vested	(5,438)		7.31
Forfeited	—		—
Non-vested at March 31, 2013	39,117	$	7.65

XML

Net Income (Loss) Per Share (Narrative) (Details)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net Income (Loss) Per Share [Abstract]
Earnings per share, Potentially dilutive shares	586,000	362,000

XML

Accounting For Stock-Based Compensation (Schedule Of Non-Vested Restricted Stock Activity) (Details) (USD $)	3 Months Ended
	Mar. 31, 2013
Accounting For Stock-Based Compensation [Abstract]
Shares, Non-vested at December 31, 2012	44,555
Shares, Vested	(5,438)
Shares, Non-vested at March 31, 2013	39,117
Weighted Average Grant Date Fair Value, Non-vested at December 31, 2012	$ 7.61
Weighted Average Grant Date Fair Value, Vested	$ 7.31
Weighted Average Grant Date Fair Value, Non-vested at March 31, 2013	$ 7.65

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2013

Intangible Assets [Abstract]

Schedule Of Intangible Assets

	March 31, 2013						December 31, 2012
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Patents	$	2,866	$	(2,692)	$	174	$	2,847	$	(2,658)	$	189

Schedule Of Amortization Expense For Intangible Assets

	Three Months Ended March 31,
(In thousands)	2013		2012
Patents	$	34	$	41

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Significant Customers (Tables)

3 Months Ended

Mar. 31, 2013

Significant Customers [Abstract]

Schedule Of Sales By Geographic Area

	Three Months Ended March 31,
(In thousands)	2013		2012
Americas	$	56	$	497
Europe		1,716		3,386
Asia		3,491		5,800
Other		114		144
Total export sales	$	5,377	$	9,827

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Marketable Securities

3 Months Ended

Mar. 31, 2013

Marketable Securities [Abstract]

Marketable Securities

2.  MARKETABLE SECURITIES:

Our investments in marketable securities are classified as available-for-sale and consist of the following:

	March 31, 2013
(In thousands)		Cost		Unrealized Gains		Unrealized Losses		Fair Value
Short-Term
U.S. government and agency obligations	$	7,577	$	13	$	(3)	$	7,587
Corporate debt securities and certificates of deposit		4,216		4		—		4,220
Marketable securities – short-term	$	11,793	$	17	$	(3)	$	11,807
Long-Term
U.S. government and agency obligations	$	7,964	$	20	$	—	$	7,984
Corporate debt securities and certificates of deposit		1,504		4		(1)		1,507
Asset backed securities		629		—		—		629
Equity security		42		3		—		45
Marketable securities – long-term	$	10,139	$	27	$	(1)	$	10,165

	December 31, 2012
(In thousands)		Cost		Unrealized Gains		Unrealized Losses		Fair Value
Short-Term
U.S. government and agency obligations	$	7,358	$	10	$	(35)	$	7,333
Corporate debt securities and certificates of deposit		4,100		5		—		4,105
Marketable securities – short-term	$	11,458	$	15	$	(35)	$	11,438
Long-Term
U.S. government and agency obligations	$	9,033	$	23	$	(23)	$	9,033
Corporate debt securities and certificates of deposit		1,192		4		(1)		1,195
Asset back securities		165		—		—		165
Equity security		42		—		—		42
Marketable securities – long-term	$	10,432	$	27	$	(24)	$	10,435

Our investments in marketable debt securities all have maturities of less than three years. At March 31, 2013, marketable debt securities valued at $19,460,000 were in an unrealized gain position totaling $41,000 and marketable debt securities valued at $2,467,000 were in an unrealized loss position totaling $4,000 (all had been in an unrealized loss position for less than twelve months).  At December 31, 2012, marketable debt securities valued at $19,012,000 were in an unrealized gain position totaling $42,000 and marketable debt securities valued at $2,819,000 were in an unrealized loss position totaling $59,000 (all had been in an unrealized loss position for less than twelve months).

Net pre-tax unrealized gains for marketable securities of $40,000 at March 31, 2013 and net pre-tax unrealized losses for marketable securities of $17,000 at December 31, 2012 were recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity.  In the three months ended March 31, 2013, we received proceeds of $2,453,000 from the sale of marketable securities.  In the three months ended March 31, 2012, we received proceeds of $1,350,000 from the sale of marketable securities.  We recognized a $23,000 loss from the sale of marketable securities in the three months ended March 31, 2013.  No gain or loss was recognized on any of the sales during the three months ended March 31, 2012.

Investments in marketable securities classified as cash equivalents of $1,055,000 at March 31, 2013 and $2,824,000 at December 31, 2012 consist of the following:

	March 31, 2013
(In thousands)		Cost		Unrealized Gains		Unrealized Losses		Recorded Basis
U.S. government and agency obligations	$	300	$	—	$	—	$	300
Corporate debt securities and certificates of deposit		755		—		—		755
	$	1,055	$	—	$	—	$	1,055

	December 31, 2012
(In thousands)		Cost		Unrealized Gains		Unrealized Losses		Recorded Basis
Corporate debt securities and certificates of deposit	$	2,824	$	—	$	—	$	2,824
	$	2,824	$	—	$	—	$	2,824

Cash and marketable securities held in foreign accounts totaled $3,113,000 at March 31, 2013 and $3,585,000 at December 31, 2012.

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Re-Organization And Restructure Charge (Tables)

3 Months Ended

Mar. 31, 2013

Re-Organization And Restructure Charge [Abstract]

Summary Of Severance And Relocation Accruals

(In thousands)		Fourth Quarter 2012 Workforce Reduction
Balance, January 1, 2013	$	192
Cost incurred		—
Payments made		126
Balance, March 31, 2013	$	66

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Fair Value Measurements (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value Measurements [Abstract]
Fair value of foreign exchange forward contracts, representing a loss	$ 8
Fair value of foreign exchange forward contracts, representing a gain		$ 153

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Significant Customers (Schedule Of Sales By Geographic Area) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenue, Major Customer [Line Items]
Export sales	$ 5,377	$ 9,827
Americas [Member]
Revenue, Major Customer [Line Items]
Export sales	56	497
Europe [Member]
Revenue, Major Customer [Line Items]
Export sales	1,716	3,386
Asia [Member]
Revenue, Major Customer [Line Items]
Export sales	3,491	5,800
Other [Member]
Revenue, Major Customer [Line Items]
Export sales	$ 114	$ 144

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 5,473	$ 7,340
Marketable securities	11,807	11,438
Accounts receivable, less allowance for doubtful accounts of $745 at March 31, 2013 and $775 at December 31, 2012	6,248	6,129
Inventories	12,190	12,533
Income tax refunds receivable	811	1,325
Other current assets	1,558	1,338
Deferred tax assets	100	100
Total current assets	38,187	40,203
Marketable securities, long-term	10,165	10,435
Equipment and leasehold improvements, net	1,499	1,719
Intangible and other assets, net	174	189
Goodwill	569	569
Other assets	141	142
Deferred tax assets	349	363
Total assets	51,084	53,620
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	2,231	2,476
Advance customer payments	638	563
Accrued expenses	1,894	1,840
Deferred tax liability	29	29
Total current liabilities	4,792	4,908
Deferred rent	377	408
Deferred warranty revenue	180	146
Reserve for income taxes	688	686
Total liabilities	6,037	6,148
Commitments and contingencies
Stockholders' equity:
Preferred stock, no par value, 5,000,000 shares authorized, none outstanding
Common stock, no par value, 25,000,000 shares authorized, 6,947,299 shares issued and outstanding at March 31, 2013 and 6,969,772 shares issued and outstanding at December 31, 2012	31,326	31,410
Accumulated other comprehensive loss	(352)	(157)
Retained earnings	14,073	16,219
Total stockholders' equity	45,047	47,472
Total liabilities and stockholders' equity	$ 51,084	$ 53,620

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Inventories And Warranties (Schedule Of Inventory Components) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Inventories And Warranties [Abstract]
Raw materials and purchased parts	$ 7,451	$ 8,152
Work in process	1,317	1,322
Finished goods	3,422	3,059
Total inventories	$ 12,190	$ 12,533

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Condensed Consolidated Statements Of Cash Flows (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (2,146,000)	$ 92,000
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	516,000	410,000
Provision for doubtful accounts	(16,000)	(48,000)
Deferred taxes	13,000
Foreign currency transaction losses	82,000	10,000
Realized losses on available-for-sale securities	23,000
Stock compensation costs	103,000	105,000
Changes in operating assets and liabilities:
Accounts receivable	(103,000)	1,623,000
Inventories	87,000	(1,438,000)
Income tax refunds receivable	514,000	9,000
Other assets	(376,000)	(91,000)
Accounts payable	(231,000)	970,000
Advance customer payments	109,000	(58,000)
Accrued expenses	18,000	(379,000)
Net cash provided by (used in) operating activities	(1,407,000)	1,205,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of available-for-sale marketable securities	765,000	2,592,000
Proceeds from sales of available-for-sale marketable securities	2,453,000	1,350,000
Purchases of available-for-sale marketable securities	(3,313,000)	(8,638,000)
Additions to equipment and leasehold improvements	(95,000)	(412,000)
Additions to patents	(19,000)	(25,000)
Net cash used in investing activities	(209,000)	(5,133,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Common stock repurchases	(186,000)
Net cash used in financing activities	(186,000)
Effects of exchange rate changes on cash and cash equivalents	(65,000)	77,000
Net decrease in cash and cash equivalents	(1,867,000)	(3,851,000)
Cash and cash equivalents - beginning of period	7,340,000	13,791,000
Cash and cash equivalents - end of period	$ 5,473,000	$ 9,940,000

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Comprehensive Income (Loss) (The Effect Of The Reclassifications From Comprehensive Income (Loss) To Earnings) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Interest income and other	$ (104)	$ 35
Cost of revenues	3,774	6,045
Research and development expenses	1,836	1,917
Selling, general and administrative expenses	3,127	3,226
Income (loss) before income taxes	(2,128)	127
Income tax benefit	(18)	(35)
Net income (loss)	(2,146)	92
Amount Reclassified from Accumulated Other Comprehensive Income [Member] | Unrealized Gains (Losses) On Foreign Exchange Forward Contracts [Member]
Cost of revenues	25	(52)
Research and development expenses	5	(13)
Selling, general and administrative expenses	3	(10)
Income (loss) before income taxes	33	(75)
Income tax benefit		26
Net income (loss)	33	(49)
Amount Reclassified from Accumulated Other Comprehensive Income [Member] | Unrealized Losses On Available-for-sale Securities [Member]
Interest income and other	(23)
Net income (loss)	$ (23)

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Marketable Securities (Narrative) (Details) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Gain (Loss) on Investments [Line Items]
Maximum maturity of debt securities, years	3 years
Net pre-tax unrealized gains (losses) for marketable securities	$ 40,000		$ (17,000)
Maximum time for loss position, months	12 months		12 months
Proceeds from sale of marketable securities	2,453,000	1,350,000
Recognized loss from the sale of marketable securities	(23,000)
Marketable securities classified as cash equivalents, Recorded basis	1,055,000		2,824,000
Foreign Accounts [Member]
Gain (Loss) on Investments [Line Items]
Cash and marketable securities held in foreign accounts	3,113,000		3,585,000
Debt Securities Unrealized Gain Position [Member]
Gain (Loss) on Investments [Line Items]
Fair value	19,460,000		19,012,000
Unrealized gain	41,000		42,000
Debt Securities Unrealized Loss Position [Member]
Gain (Loss) on Investments [Line Items]
Fair value	2,467,000		2,819,000
Unrealized loss	$ (4,000)		$ (59,000)

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Share Repurchase

3 Months Ended

Mar. 31, 2013

Share Repurchase [Abstract]

Share Repurchase

16.  SHARE REPURCHASE:

In October of 2012, our Board of Directors authorized a $3.0 million share repurchase program.  The common stock is being acquired from time to time in open market transactions, block purchases and other transactions complying with the Securities and Exchange Commission’s Rule 10b-18.  We adopted a 10b5-1 trading plan to implement the repurchase program.  In the three months ended March 31, 2013, we spent $186,000to repurchase a total of 27,911shares of our common stock.  As of March 31, 2013, we may spend up to an additional $2.8 million for share repurchases under the October 2012 repurchase authorization.  We did not repurchase any stock in the three months ended March 31, 2012.

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Marketable Securities (Schedule Of Marketable Securities) (Details) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Marketable Securities - Short-Term [Member]
Gain (Loss) on Investments [Line Items]
Cost	$ 11,793,000	$ 11,458,000
Unrealized Gains	17,000	15,000
Unrealized Losses	(3,000)	(35,000)
Fair Value	11,807,000	11,438,000
Marketable Securities - Short-Term [Member] | US States Government And Agency Obligations [Member]
Gain (Loss) on Investments [Line Items]
Cost	7,577,000	7,358,000
Unrealized Gains	13,000	10,000
Unrealized Losses	(3,000)	(35,000)
Fair Value	7,587,000	7,333,000
Marketable Securities - Short-Term [Member] | Corporate Debt Securities And Certificates Of Deposit [Member]
Gain (Loss) on Investments [Line Items]
Cost	4,216,000	4,100,000
Unrealized Gains	4,000	5,000
Fair Value	4,220,000	4,105,000
Marketable Securities - Long-Term [Member]
Gain (Loss) on Investments [Line Items]
Cost	10,139,000	10,432,000
Unrealized Gains	27,000	27,000
Unrealized Losses	(1,000)	(24,000)
Fair Value	10,165,000	10,435,000
Marketable Securities - Long-Term [Member] | US States Government And Agency Obligations [Member]
Gain (Loss) on Investments [Line Items]
Cost	7,964,000	9,033,000
Unrealized Gains	20,000	23,000
Unrealized Losses		(23,000)
Fair Value	7,984,000	9,033,000
Marketable Securities - Long-Term [Member] | Corporate Debt Securities And Certificates Of Deposit [Member]
Gain (Loss) on Investments [Line Items]
Cost	1,504,000	1,192,000
Unrealized Gains	4,000	4,000
Unrealized Losses	(1,000)	(1,000)
Fair Value	1,507,000	1,195,000
Marketable Securities - Long-Term [Member] | Asset-backed Securities [Member]
Gain (Loss) on Investments [Line Items]
Cost	629,000	165,000
Fair Value	629,000	165,000
Marketable Securities - Long-Term [Member] | Equity Security [Member]
Gain (Loss) on Investments [Line Items]
Cost	42,000	42,000
Unrealized Gains	3,000
Fair Value	$ 45,000	$ 42,000

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Recent Accounting Developments (Policy)

3 Months Ended

Mar. 31, 2013

Recent Accounting Developments [Abstract]

Comprehensive Income Policy

In February 2013, the FASB issued amended disclosure requirements for amounts classified out of other comprehensive income to improve the transparency of reporting these reclassifications (ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income). The amended guidance requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts.  We adopted the amended guidance effective January 1, 2013.  Our adoption of the amended disclosure requirements had no impact on our consolidated financial results as the amendments relate only to changes in financial statement presentation.

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Interim Reporting

3 Months Ended

Mar. 31, 2013

Interim Reporting [Abstract]

Interim Reporting

1.  INTERIM REPORTING:

The interim condensed consolidated financial statements presented herein as of March 31, 2013, and for the three month periods ended March 31, 2013 and 2012, are unaudited, but in the opinion of management, include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position, results of operations and cash flows for the periods presented.

The results of operations for the three month period ended March 31, 2013 do not necessarily indicate the results to be expected for the full year. The December 31, 2012 consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited interim condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2012.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Condensed Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 745	$ 775
Preferred stock, par value
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares outstanding
Common stock, par value
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	6,947,299	6,969,772
Common stock, shares outstanding	6,947,299	6,969,772

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Net Income (Loss) Per Share

3 Months Ended

Mar. 31, 2013

Net Income (Loss) Per Share [Abstract]

Net Income (Loss) Per Share

11.  NET INCOME (LOSS) PER SHARE:

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period.  Net income per diluted share is computed by dividing net income by the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares consist of common shares to be issued upon exercise of stock options, restricted stock units and from participation in our employee stock purchase plan, as calculated using the treasury stock method.  All potentially dilutive common equivalent shares are excluded from the calculation of net loss per diluted share for the three months ended March 31, 2013 due to their anti-dilutive effect.  The components of net income (loss) per basic and diluted share are as follows:

(In thousands except per share amounts)	Net Loss		Weighted Average Shares Outstanding			Per Share Amount
Three Months Ended March 31, 2013:
Basic	$	(2,146)		6,961	$	(0.31)
Dilutive effect of common equivalent shares		—		—		—
Dilutive	$	(2,146)		6,961	$	(0.31)

(In thousands except per share amounts)	Net Income		Weighted Average Shares Outstanding			Per Share Amount
Three Months Ended March 31, 2012:
Basic	$	92		6,933	$	0.01
Dilutive effect of common equivalent shares		—		49		—
Dilutive	$	92		6,982	$	0.01

The calculation of diluted net income (loss) per common share excludes 586,000 potentially dilutive shares for the three months ended March 31, 2013 and 362,000 potentially dilutive shares for the three months ended March 31, 2012, because their effect would be anti-dilutive.

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Document And Entity Information	3 Months Ended
	Mar. 31, 2013	Apr. 30, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2013
Entity Registrant Name	CYBEROPTICS CORP
Entity Central Index Key	0000768411
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		6,925,599

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Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2013

Comprehensive Income (Loss) [Abstract]

Comprehensive Income (Loss)

12.  COMPREHENSIVE INCOME (LOSS):

Taxes related to items of other comprehensive income (loss) are as follows:

	Three Months Ended March 31, 2013						Three Months Ended March 31, 2012
(In thousands)	Before Tax		Tax Provision /(Benefit)		Net of Tax Amount		Before Tax		Tax Provision /(Benefit)		Net of Tax Amount
Foreign currency translation adjustments	$	(79)	$	—	$	(79)	$	211	$	—	$	211
Net changes related to available-for-sale
securities:
Unrealized gains (losses)		33		—		33		(6)		(2)		(4)
Reclassification adjustment for losses
included in net income (loss)		23		—		23		—		—		—
Total net changes related to
available-for-sale securities		56		—		56		(6)		(2)		(4)
Unrealized gains (losses) on foreign
exchange forward contracts:
Unrealized gains (losses)		(139)		—		(139)		323		112		211
Reclassification adjustment for (gains)
losses included in net income (loss)		(33)		—		(33)		75		26		49
Total unrealized gains (losses) on
foreign exchange forward contracts		(172)		—		(172)		398		138		260
Other comprehensive income (loss)	$	(195)	$	—	$	(195)	$	603	$	136	$	467

Reclassification adjustments are made to avoid double counting in comprehensive income (loss) items that are also recorded as part of net income (loss).  Reclassifications to earnings related to cash flow hedging instruments are discussed in Note 3.  Income taxes are not provided for foreign currency translation adjustments relating to permanent investments in international subsidiaries.  We have recorded a valuation allowance against substantially all of our United States and Singapore based deferred tax assets.  Accordingly, we do not expect to record a tax provision for items of other comprehensive income (loss) until such time as the valuation allowance is substantially reduced.  The effect of the reclassifications from comprehensive income (loss) to earnings by line item is as follows:

Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income (a)				Affected Line Item in the Statements of Operations
	Three Months Ended March 31,
(In thousands)	2013		2012
Unrealized losses on
available-for-sale securities	$	(23)	$	—	Interest income and other
		—		—	Income tax provision
	$	(23)	$	—	Net of tax
Unrealized gains (losses) on foreign
exchange forward contracts	$	25	$	(52)	Cost of revenues
		5		(13)	Research and development expenses
		3		(10)	Selling, general and administrative expenses
		33		(75)	Total before tax
		—		26	Income tax benefit
	$	33	$	(49)	Net of tax

(a) Amounts in parentheses indicate debits to profit/loss.

At March 31, 2013 and December 31, 2012, components of accumulated other comprehensive income (loss) are as follows:

(In thousands)		March 31,       2013		December 31, 2012
Unrealized gains (losses) on available-for-sale securities	$	33	$	(23)
Unrealized gains (losses) on effective portion of
foreign exchange forward contracts, net		(61)		111
Foreign currency translation adjustments		(324)		(245)
Balance at end of period	$	(352)	$	(157)

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Condensed Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Condensed Consolidated Statements Of Operations [Abstract]
Revenues	$ 6,713	$ 11,280
Cost of revenues	3,774	6,045
Gross margin	2,939	5,235
Research and development expenses	1,836	1,917
Selling, general and administrative expenses	3,127	3,226
Income (loss) from operations	(2,024)	92
Interest income and other	(104)	35
Income (loss) before income taxes	(2,128)	127
Income tax provision	18	35
Net income (loss)	$ (2,146)	$ 92
Net income (loss) per share - Basic	$ (0.31)	$ 0.01
Net income (loss) per share - Diluted	$ (0.31)	$ 0.01
Weighted average shares outstanding - Basic	6,961	6,933
Weighted average shares outstanding - Diluted	6,961	6,982

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Inventories And Warranties

3 Months Ended

Mar. 31, 2013

Inventories And Warranties [Abstract]

Inventories And Warranties

6.  INVENTORIES AND WARRANTIES:

Inventories consist of the following:

(In thousands)	March 31, 2013		December 31, 2012
Raw materials and purchased parts	$	7,451	$	8,152
Work in process		1,317		1,322
Finished goods		3,422		3,059
Total inventories	$	12,190	$	12,533

Warranty costs:

We provide for the estimated cost of product warranties at the time revenue is recognized, generally for one year. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of component suppliers, warranty obligations are affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure.  Should actual product failure rates, material usage or service delivery costs differ from our estimates, revisions to the estimated warranty liability would be required.  Our warranty liability is included as a component of accrued expenses.  At the end of each reporting period we revise our estimated warranty liability based on these factors.

A reconciliation of the changes in our estimated warranty liability is as follows:

	Three Months Ended March 31,
(In thousands)	2013		2012
Balance at beginning of period	$	694	$	985
Accrual for warranties		151		332
Settlements made during the period		(203)		(301)
Balance at end of period	$	642	$	1,016

Deferred warranty revenue:

The current portion of our deferred warranty revenue is included as a component of advance customer payments.  A reconciliation of the changes in our deferred warranty revenue is as follows:

	Three Months Ended March 31,
(In thousands)	2013		2012
Balance at beginning of period	$	582	$	806
Revenue deferrals		94		46
Amortization of deferred revenue		(135)		(105)
Total deferred warranty revenue		541		747
Current portion of deferred warranty revenue		(361)		(482)
Long-term deferred warranty revenue	$	180	$	265

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Accounting For Stock-Based Compensation

3 Months Ended

Mar. 31, 2013

Accounting For Stock-Based Compensation [Abstract]

Accounting For Stock-Based Compensation

5.  ACCOUNTING FOR STOCK-BASED COMPENSATION:

All equity-based payments to employees, including grants of employee stock options and restricted stock units, are recognized as an expense in our consolidated statement of operations based on the grant date fair value of the award.  We utilize the straight-line method of expense recognition over the award’s service period for our graded vesting options.  The fair value of stock options granted has been determined using the Black-Scholes model.  The compensation expense recognized for all equity based awards is net of estimated forfeitures, which are based on historical data.  We have classified equity based compensation within our statement of operations in the same manner as our cash based employee compensation costs.

Equity based compensation expense in the three months ended March 31, 2013 totaled $103,000 and includes $66,000 for stock option awards, $12,000 for our employee stock purchase plan, and $25,000 for unvested restricted stock units.  Equity based compensation expense in the three months ended March 31, 2012 totaled $105,000 and includes $64,000 for stock option awards, $15,000 for our employee stock purchase plan, and $26,000 for unvested restricted stock units.

At March 31, 2013, the total unrecognized compensation cost related to non-vested equity based compensation arrangements was $878,000 and the related weighted average period over which it is expected to be recognized is 2.15 years.

Stock Options

We have two stock incentive plans that are administered under the supervision of the Compensation Committee of the Board of Directors.  There are 1,044,307 shares of common stock reserved in the aggregate for issuance of options and other stock based benefits under these plans, including restricted stock units and share grants to employees, officers and others.  Reserved shares underlying canceled options are available for future grant under our active plan.  Options are granted at an option price per share equal to or greater than the market value on the date of grant.  Generally, options granted to employees vest over a four-year period and expire seven or ten years after the date of grant.  As of March 31, 2013, there were 462,287 shares of common stock available under these plans for future issuance to employees, officers and others.

The following is a summary of stock option activity during the three months ended March 31, 2013:

	Options Outstanding		Weighted Average Exercise Price Per Share
Outstanding, December 31, 2012	544,153	$	8.68
Granted	—		—
Exercised	—		—
Expired	(1,250)		8.71
Forfeited	—		—
Outstanding, March 31, 2013	542,903	$	8.68
Exercisable, March 31, 2013	326,239	$	9.26

The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price.  At March 31, 2013,the weighted average remaining contractual term of all outstanding options was 4.02 years and their aggregate intrinsic value was $143,815.  At March 31, 2013, the weighted average remaining contractual term of options that were exercisable was 2.93 years and their aggregate intrinsic value was $132,090.  We received no proceeds from the exercise of stock options in the three months ended March 31, 2013 or 2012. 

Restricted Stock Units

Our 1998 Stock Incentive Plan also permits our Compensation Committee to grant other stock-based benefits, including restricted stock units.  Restricted stock units are valued at a price equal to the fair market value of our common stock on the date of grant, vest over a four year period provided the employee is still working for the company and entitle the holders to one share of our common stock for each restricted stock unit.  The aggregate fair value of outstanding restricted stock units as of March 31, 2013 was $240,000.

A summary of activity in non-vested restricted stock units for the three months ended March 31, 2013 is as follows:

Non-vested restricted stock units	Shares		Weighted Average Grant Date Fair Value
Non-vested at December 31, 2012	44,555	$	7.61
Granted	—		—
Vested	(5,438)		7.31
Forfeited	—		—
Non-vested at March 31, 2013	39,117	$	7.65

Employee Stock Purchase Plan

We have an Employee Stock Purchase Plan available to eligible U.S. employees. Under terms of the plan, eligible employees may designate from 1% to 10% of their compensation to be withheld through payroll deductions, up to a maximum of $6,500 in each plan year, for the purchase of common stock at 85% of the lower of the market price on the first or last day of the offering period.  There were no shares issued under this plan in the three months ended March 31, 2013 or March 31, 2012.   As of March 31, 2013, 166,582 shares remain available for future issuance under this plan.

Stock Grant Plan for Non-Employee Directors

Our stock grant plan for non-employee directors provides for automatic grants of 1,000 shares of our common stock to each of our non-employee directors upon their re-election to the Board of Directors.  The plan provides for a total of 30,000 shares of our common stock for issuance to directors and will expire on May 19, 2018.  No shares were issued under this plan in the three months ended March 31, 2013 or March 31, 2012.  There are presently 11,000 shares of common stock reserved in the aggregate for future issuance under this plan.

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Susequent Event - New Singapore Lease

3 Months Ended

Mar. 31, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

17.  SUBSEQUENT EVENT – NEW SINGAPORE LEASE:

In April 2013, we entered into a new lease agreement for our existing 20,000 square foot Singapore facility that will become effective on July 25, 2013.  The new agreement provides that we will lease the facility through July 24, 2016.  Future minimum lease payments due under the lease agreement are approximately $1.3 million.  We estimate an increase in average annual rental expense over the term of the new lease of approximately $60,000.   At the end of the lease period in 2016, we will have the option to renew the lease for an additional 3 years.

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Income Taxes

3 Months Ended

Mar. 31, 2013

Income Taxes [Abstract]

Income Taxes

13.  INCOME TAXES:

We recorded income tax expense of $18,000 in the three months ended March 31, 2013, reflecting an effective tax rate of a negative 1%, compared to income tax expense of $35,000 in the three months ended March 31, 2012, reflecting an effective tax rate of 28%.  In the fourth quarter of 2012, we recorded a valuation allowance against substantially all of our United States and Singapore based deferred tax assets.  Our income tax expense and effective tax rate in the three months ended March 31, 2013, reflects minimal state income tax expense and foreign income tax expense associated with our subsidiaries in the United Kingdom and China.

We currently have significant deferred tax assets as a result of temporary differences between taxable income on our tax returns and U.S. GAAP income, research and development tax credit carry forwards and federal, state and foreign net operating loss carry forwards.  A deferred tax asset generally represents future tax benefits to be received when temporary differences previously reported in our financial statements become deductible for income tax purposes, when net operating loss carry forwards are applied against future taxable income, or when tax credit carry forwards are utilized on our tax returns. We assess the realizability of our deferred tax assets and the need for a valuation allowance based on the guidance provided in current financial accounting standards.

Significant judgment is required in determining the realizability of our deferred tax assets. The assessment of whether valuation allowances are required considers, among other matters, the nature, frequency and severity of any current and cumulative losses, forecasts of future profitability, the duration of statutory carry forward periods, our experience with loss carry forwards not expiring unused and tax planning alternatives.

At December 31, 2012, we concluded that a valuation allowance was needed for substantially all of our United States and Singapore based deferred tax assets due to the decline in our level of profitability and near term financial outlook.  In analyzing the need for a valuation allowance, we first considered our history of operating results for income tax purposes over the past three years in each of the tax jurisdictions where we operate, our financial performance in recent quarters, statutory carry forward periods and tax planning alternatives.  Finally, we considered both our near and long-term financial outlook and timing regarding when we might return to profitability.  After considering all available evidence, both positive and negative, we concluded that a valuation allowance with respect to substantially all of our U.S. and Singapore based deferred tax assets, was required at March 31, 2013 and December 31, 2012.

Deferred tax assets at March 31, 2013 include net operating loss carry forwards incurred in the UK by CyberOptics Ltd., which was acquired in 1999. The utilization of these net operating loss carry forwards is dependent on CyberOptics Ltd.’s ability to generate sufficient UK taxable income during the carry forward period.

The valuation allowance at March 31, 2012 was needed for various long-term state tax credit carry forwards, state operating loss carry forwards and capital losses for which recovery is not deemed to be more likely than not.

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Significant Customers

3 Months Ended

Mar. 31, 2013

Significant Customers [Abstract]

Significant Customers

9.  SIGNIFICANT CUSTOMERS:

Export sales were 80% of revenue in the three months ended March 31, 2013 and 87% of revenue in the three months ended March 31, 2012.  Virtually all of our export sales are negotiated, invoiced and paid in U.S. dollars. Export sales by geographic area are summarized as follows:

	Three Months Ended March 31,
(In thousands)	2013		2012
Americas	$	56	$	497
Europe		1,716		3,386
Asia		3,491		5,800
Other		114		144
Total export sales	$	5,377	$	9,827

Our LaserAlign sensor family has historically accounted for a significant portion of our sales and profitability.  Our revenue, results of operations and cash flows would be negatively impacted if our LaserAlign customers, primarily Juki and Assembleon, are unsuccessful selling the products into which our sensors are incorporated, design their products to function without our sensors, purchase sensors from other suppliers, or otherwise terminate their relationships with us.

We are dependent upon two customers, Juki and Assembleon, for a significant portion of our total revenue.  For the three months ended March 31, 2013, sales to Juki accounted for 8% of our total revenue and sales to Assembleon accounted for 10% of our total revenue.

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Comprehensive Income (Loss) (Schedule Of Accumulated Comprehensive Income (Loss)) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Comprehensive Income (Loss) [Abstract]
Unrealized gains (losses) on available-for-sale securities	$ 33	$ (23)
Unrealized gains (losses) on effective portion of foreign exchange forward contracts, net	(61)	111
Foreign currency translation adjustments	(324)	(245)
Balance at the end of period	$ (352)	$ (157)

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Intangible Assets

3 Months Ended

Mar. 31, 2013

Intangible Assets [Abstract]

Intangible Assets

7.  INTANGIBLE ASSETS:

Intangible assets consist of the following:

	March 31, 2013						December 31, 2012
(In thousands)	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
Patents	$	2,866	$	(2,692)	$	174	$	2,847	$	(2,658)	$	189

Amortization expense for the three month periods ended March 31, 2013 and 2012 is as follows:

	Three Months Ended March 31,
(In thousands)	2013		2012
Patents	$	34	$	41

Intangible and other long lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.  An impairment loss would be recognized when future undiscounted cash flows expected to result from use of the asset and eventual disposition are less than the carrying amount.

Amortization of patents has been classified as research and development expense in the accompanying statement of operations.  Estimated aggregate amortization expense based on current intangibles for the next four years is expected to be as follows: $83,000 for the remainder of 2013, $65,000 in 2014, $25,000 in 2015, and $1,000 in 2016.

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Goodwill

3 Months Ended

Mar. 31, 2013

Goodwill [Abstract]

Goodwill

8.  GOODWILL:

We assess our goodwill for impairment in the fourth quarter of each year, and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.  In the first quarter of 2013, our stock market capitalization fell below our net book value for a period of more than 30 days, indicating that the value of our goodwill might be impaired.

In evaluating whether goodwill was impaired, we compared our fair value to our net book value or carrying value (Step 1 of the impairment test).  In calculating fair value, we used the income approach.  The income approach is a valuation technique under which we estimate future cash flows using financial forecasts.  Future estimated cash flows are discounted to their present value to calculate fair value.  When considering fair value, we also gave consideration to the control premium in excess of our current market capitalization that might be obtained from a third party acquirer.  In the situation where net book value or carrying value exceeds fair value, the amount of impairment loss must be measured.  The measurement of impairment (Step 2of the impairment test) is calculated by determining the implied fair value of goodwill, which equals the excess of any remaining fair value over the fair values assigned to other assets and liabilities. Goodwill impairment is measured as the excess of the carrying amount of goodwill over its implied fair value.

In determining fair value under the income approach, our expected cash flows are affected by various assumptions.  Fair value on a discounted cash flow basis uses our business plan and projections as the basis for expected future cash flow forecasts, with an estimation of residual growth rates thereafter.  For our first quarter 2013 impairment test, we utilized a 15% discount rate and our terminal value was based on a multiple equal to 6 times our projected future earnings before interest, taxes, depreciation and amortization.  We believe the significant assumptions used in our 2013 goodwill impairment test, including a 15% discount rate, are reflective of the assumptions currently used in the marketplace to evaluate fair value. Our recent analyses indicate that our goodwill at March 31, 2013 and December 31, 2012 in the amount of $569,000 is not impaired.

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Re-Organization And Restructure Charge

3 Months Ended

Mar. 31, 2013

Re-Organization And Restructure Charge [Abstract]

Re-Organization And Restructure Charge

10.  RE-ORGANIZATION AND RESTRUCTURE CHARGE:

In the third quarter of 2012, we consolidated research and development for our semiconductor products from Portland, Oregon into our Minneapolis headquarters facility. We believe this move will streamline our business and provide our sensor engineers in Minneapolis with more efficient access to our WaferSense® technology and products.  The related restructure charge from this action of $217,000 was fully paid prior to December 31, 2012.   

Additional severance costs of $523,000 were incurred in the fourth quarter of 2012 when we reduced our global workforce by approximately 10% or 20 employees in response to the sluggish economy and weak SMT and semiconductor market conditions.  No restructuring or severance costs were incurred in the three months ended March 31, 2013 or March 31, 2012.

A summary of our restructuring accrual is as follows:

(In thousands)		Fourth Quarter 2012 Workforce Reduction
Balance, January 1, 2013	$	192
Cost incurred		—
Payments made		126
Balance, March 31, 2013	$	66

The remaining accrued severance in the amount of $66,000 at March 31, 2013 will be paid prior to July 1, 2013. 

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Susequent Event - New Singapore Lease (Details) (Subsequent Event [Member], USD $)	3 Months Ended
	Mar. 31, 2013 sqft
Subsequent Event [Member]
Subsequent Event [Line Items]
Mixed office and warehouse facility, square footage	20,000
Lease expiration date	Jul. 24, 2016
Operating Leases, Future Minimum Payments Due	$ 1,300,000
Operating Leases, Rent Expense	$ 60,000
Lease renewal term	3 years

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Comprehensive Income (Loss) (Tables)

3 Months Ended

Mar. 31, 2013

Comprehensive Income (Loss) [Abstract]

Schedule Of Other Comprehensive Income (Loss)

	Three Months Ended March 31, 2013						Three Months Ended March 31, 2012
(In thousands)	Before Tax		Tax Provision /(Benefit)		Net of Tax Amount		Before Tax		Tax Provision /(Benefit)		Net of Tax Amount
Foreign currency translation adjustments	$	(79)	$	—	$	(79)	$	211	$	—	$	211
Net changes related to available-for-sale
securities:
Unrealized gains (losses)		33		—		33		(6)		(2)		(4)
Reclassification adjustment for losses
included in net income (loss)		23		—		23		—		—		—
Total net changes related to
available-for-sale securities		56		—		56		(6)		(2)		(4)
Unrealized gains (losses) on foreign
exchange forward contracts:
Unrealized gains (losses)		(139)		—		(139)		323		112		211
Reclassification adjustment for (gains)
losses included in net income (loss)		(33)		—		(33)		75		26		49
Total unrealized gains (losses) on
foreign exchange forward contracts		(172)		—		(172)		398		138		260
Other comprehensive income (loss)	$	(195)	$	—	$	(195)	$	603	$	136	$	467

The Effect Of The Reclassifications From Comprehensive Income (Loss) To Earnings

Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income (a)				Affected Line Item in the Statements of Operations
	Three Months Ended March 31,
(In thousands)	2013		2012
Unrealized losses on
available-for-sale securities	$	(23)	$	—	Interest income and other
		—		—	Income tax provision
	$	(23)	$	—	Net of tax
Unrealized gains (losses) on foreign
exchange forward contracts	$	25	$	(52)	Cost of revenues
		5		(13)	Research and development expenses
		3		(10)	Selling, general and administrative expenses
		33		(75)	Total before tax
		—		26	Income tax benefit
	$	33	$	(49)	Net of tax

Amounts in parentheses indicate debits to profit/loss.

Schedule Of Accumulated Other Comprehensive Income (Loss)

(In thousands)		March 31,       2013		December 31, 2012
Unrealized gains (losses) on available-for-sale securities	$	33	$	(23)
Unrealized gains (losses) on effective portion of
foreign exchange forward contracts, net		(61)		111
Foreign currency translation adjustments		(324)		(245)
Balance at end of period	$	(352)	$	(157)

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Goodwill (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Goodwill [Abstract]
Period of time during the period in which the market capitalization of the Company's stock fell below the net book value requiring a goodwill impairment test	30 days
Goodwill impairment test inputs, discount rate		15.00%
Goodwill	$ 569	$ 569

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Recent Accounting Developments

3 Months Ended

Mar. 31, 2013

Recent Accounting Developments [Abstract]

Recent Accounting Developments

15.  RECENT ACCOUNTING DEVELOPMENTS:

In February 2013, the FASB issued amended disclosure requirements for amounts classified out of other comprehensive income to improve the transparency of reporting these reclassifications (ASU No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income). The amended guidance requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts.  We adopted the amended guidance effective January 1, 2013.  Our adoption of the amended disclosure requirements had no impact on our consolidated financial results as the amendments relate only to changes in financial statement presentation.

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Derivatives (Tables)

3 Months Ended

Mar. 31, 2013

Derivatives [Abstract]

Schedule Of Cash Flow Hedges

	Three Months Ended March 31, 2013
(In thousands)		Pretax Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Effective Portion of Derivative		Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income (Loss)		Ineffective Portion of Gain (Loss) on Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (Loss)
Cost of sales		$	(87)	$	25	$	—
Research and development			(30)		5		—
Sales and marketing			(22)		3		—
Total		$	(139)	$	33	$	—

	Three Months Ended March 31, 2012
(In thousands)		Pretax Gain (Loss) Recognized in Other Comprehensive Income (Loss) on Effective Portion of Derivative		Pretax Gain (Loss) Recognized in Income on Effective Portion of Derivative as a Result of Reclassification from Accumulated Other Comprehensive Income (Loss)		Ineffective Portion of Gain (Loss) on Derivative and Amount Excluded from Effectiveness Testing Recognized in Income (Loss)
Cost of sales		$	228	$	(52)	$	—
Research and development			53		(13)		—
Sales and marketing			42		(10)		—
Total		$	323	$	(75)	$	—

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Intangible Assets (Schedule Of Intangible Assets) (Details) (Patents [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 2,866	$ 2,847
Accumulated Amortization	(2,692)	(2,658)
Net	$ 174	$ 189

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Fair Value Measurements (Fair Value Measurements For Marketable Securities And Foreign Exchange Forward Contracts) (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	$ 21,972	$ 21,873
Derivative instruments-liabilities: Foreign exchange forward contracts	8
Derivative instruments-assets: Foreign exchange forward contracts		153
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	45	42
Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	21,927	21,831
Derivative instruments-liabilities: Foreign exchange forward contracts	8
Derivative instruments-assets: Foreign exchange forward contracts		153
Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Derivative instruments-assets: Foreign exchange forward contracts
US States Government And Agency Obligations [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	15,571	16,366
US States Government And Agency Obligations [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	15,571	16,366
US States Government And Agency Obligations [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Corporate Debt Securities And Certificates Of Deposit [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	5,727	5,300
Corporate Debt Securities And Certificates Of Deposit [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	5,727	5,300
Corporate Debt Securities And Certificates Of Deposit [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Asset-backed Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	629	165
Asset-backed Securities [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	629	165
Asset-backed Securities [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities
Equity Security [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	45	42
Equity Security [Member] | Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities	45	42
Equity Security [Member] | Significant Unobservable Inputs (Level 3) [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Marketable securities

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Condensed Consolidated Statements Of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Condensed Consolidated Statements Of Comprehensive Income (Loss) [Abstract]
Net income (loss)	$ (2,146)	$ 92
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments	(79)	211
Unrealized gains (losses) on available-for-sale securities:
Unrealized gains (losses) for the period	33	(6)
Reclassification adjustment for losses included in net income (loss)	23
Total unrealized gains (losses) on available-for-sale securities	56	(6)
Unrealized gains (losses) on foreign exchange forward contracts:
Unrealized gains (losses) for the period	(139)	323
Reclassification adjustment for (gains) losses included in net income (loss)	(33)	75
Total unrealized gains (losses) on foreign exchange forward contracts	(172)	398
Other comprehensive income (loss), before tax	(195)	603
Income tax provision related to items of other comprehensive income (loss)		136
Other comprehensive income (loss), net of tax	(195)	467
Total comprehensive income (loss)	$ (2,341)	$ 559

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Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

4.  FAIR VALUE MEASUREMENTS:

We determine the fair value of our assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1).  The next highest priority is based on quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in non-active markets or other observable inputs (Level 2).  The lowest priority is given to unobservable inputs (Level 3).  The following provides information regarding fair value measurements for our marketable securities and foreign exchange forward contracts as of March 31, 2013 and December 31, 2012 according to the three-level fair value hierarchy:

			Fair Value Measurements at  March 31, 2013 Using
(In thousands)	Balance   March 31, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. government and agency obligations	$	15,571		$	—	$	15,571	$	—
Corporate debt securities and certificates of deposit		5,727			—		5,727		—
Asset backed securities		629			—		629		—
Equity security		45			45		—		—
Total marketable securities	$	21,972		$	45	$	21,927	$	—
Derivative instruments-liabilities:
Foreign exchange forward contracts	$	8		$	—	$	8	$	—

			Fair Value Measurements at  December 31, 2012 Using
(In thousands)	Balance December 31, 2012			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. government and agency obligations	$	16,366		$	—	$	16,366	$	—
Corporate debt securities and certificates of deposit		5,300			—		5,300		—
Asset backed securities		165			—		165		—
Equity security		42			42		—		—
Total marketable securities	$	21,873		$	42	$	21,831	$	—
Derivative instruments-assets:
Foreign exchange forward contracts	$	153		$	—	$	153	$	—

During the three months ended March 31, 2013 there were no significant transfers within the three level hierarchy.  A significant transfer is recognized when the inputs used to value a security have been changed which merit a transfer between the disclosed levels of the valuation hierarchy.

The fair value for our U.S. government and agency obligations, corporate debt securities and certificates of deposit and asset backed securities are determined based on valuations provided by external investment managers who obtain them from a variety of industry standard data providers.  The fair value for our equity security is based on a quoted market price obtained from an active market.

The fair value for our foreign exchange forward contracts is based on foreign currency spot and forward rates obtained from reputable financial institutions with resulting valuations periodically validated by obtaining foreign currency spot rate and forward quotes from other industry standard sources, third party or counterparty quotes.  The fair value of our foreign exchange forward contracts representing a loss in the amount of $8,000 as of March 31, 2013 has been recorded in accrued expenses.  The fair value of our foreign exchange forward contracts representing a gain in the amount of $153,000 as of December 31, 2012 has been recorded in other current assets.

The carrying amounts of financial instruments such as cash equivalents, accounts receivable, income tax refunds receivable, other assets, accounts payable, and all current liabilities approximate the related fair values due to the short-term maturities of these instruments.  Non-financial assets such as equipment and leasehold improvements, goodwill and intangible assets are subject to non-recurring fair value measurements if they are deemed impaired.  We had no re-measurements of non-financial assets to fair value during the three months ended March 31, 2013 or March 31, 2012.

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Comprehensive Income (Loss) (Schedule Of Other Comprehensive Income (Loss)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Comprehensive Income (Loss) [Abstract]
Foreign currency translation adjustment, Before Tax Amount	$ (79)	$ 211
Foreign currency translation adjustment, Net of Tax Amount	(79)	211
Unrealized gains (losses) on available-for-sale securities, Before Tax Amount	33	(6)
Unrealized gains (losses) on available-for-sale securities, Tax Provision/(Benefit)		(2)
Unrealized gains (losses) on available-for-sale securities, Net of Tax Amount	33	(4)
Reclassification adjustment for (gains) on available-for-sale securities included in net income, Before Tax Amount	23
Reclassification adjustment for (gains) on available-for-sale securities included in net income, Tax Provision/(Benefit)
Reclassification adjustment for (gains) on available-for-sale securities included in net income, Net of Tax Amount	23
Total unrealized gains (losses) on available-for-sale securities	56	(6)
Total net changes related to available-for-sale-securities, Tax Provision/(Benefit)		(2)
Total net changes related to available-for-sale securities, Net of Tax Amount	56	(4)
Unrealized gains (losses) on foreign exchange forward contracts, Before Tax Amount	(139)	323
Unrealized gains (losses) on foreign exchange forward contracts, Tax Provision/(Benefit)		112
Unrealized gains (losses) on foreign exchange forward contracts, Net of Tax Amount	(139)	211
Reclassification adjustment for (gains) losses on foreign exchange forward contracts included in net income, Before Tax Amount	(33)	75
Reclassification adjustment for (gains) losses on foreign exchange forward contracts included in net income, Tax Provision/(Benefit)		26
Reclassification adjustment for (gains) losses on foreign exchange forward contracts included in net income, Net of Tax Amount	(33)	49
Total unrealized gains (losses) on foreign exchange forward contracts	(172)	398
Total unrealized gains (losses) on foreign exchange forward contracts, Tax Provision/(Benefit)		138
Total unrealized gains (losses) on foreign exchange forward contracts, Net of Tax Amount	(172)	260
Other comprehensive income (loss), Before Tax Amount	(195)	603
Other comprehensive income (loss), Tax Provision/(Benefit)		136
Other comprehensive income (loss), Net of Tax Amount	$ (195)	$ 467

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements For Marketable Securities And Foreign Exchange Forward Contracts

			Fair Value Measurements at  March 31, 2013 Using
(In thousands)	Balance   March 31, 2013			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. government and agency obligations	$	15,571		$	—	$	15,571	$	—
Corporate debt securities and certificates of deposit		5,727			—		5,727		—
Asset backed securities		629			—		629		—
Equity security		45			45		—		—
Total marketable securities	$	21,972		$	45	$	21,927	$	—
Derivative instruments-liabilities:
Foreign exchange forward contracts	$	8		$	—	$	8	$	—

			Fair Value Measurements at  December 31, 2012 Using
(In thousands)	Balance December 31, 2012			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Marketable securities:
U.S. government and agency obligations	$	16,366		$	—	$	16,366	$	—
Corporate debt securities and certificates of deposit		5,300			—		5,300		—
Asset backed securities		165			—		165		—
Equity security		42			42		—		—
Total marketable securities	$	21,873		$	42	$	21,831	$	—
Derivative instruments-assets:
Foreign exchange forward contracts	$	153		$	—	$	153	$	—

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Derivatives (Narrative) (Details) (USD $)	3 Months Ended			3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2012	Mar. 31, 2013 Maximum [Member]	Mar. 31, 2012 Maximum [Member]
Maximum length of time to hedge, months	12 months
Remaining contract maturity, years				1 year	1 year
Foreign exchange gross notional amount	$ 7,200,000		$ 10,800,000
Unrealized gains (losses) on effective portion of foreign exchange forward contracts, net	(61,000)	111,000
Pretax unrealized loss recorded in accumulated other comprehensive income(loss)	5,000
Fair value of foreign exchange forward contracts, representing a loss	8,000
Fair value of foreign exchange forward contracts, representing a gain		$ 153,000

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Contingencies

3 Months Ended

Mar. 31, 2013

Contingencies [Abstract]

Contingencies

14.  CONTINGENCIES:

We are periodically a defendant in miscellaneous claims and disputes in the ordinary course of business.  While the outcome of these matters cannot be predicted with certainty, management presently believes the disposition of these matters will not have a material effect on our financial position, results of operations or cash flows.

In the normal course of business to facilitate sales of our products and services, we at times indemnify other parties, including customers, with respect to certain matters.  In these instances, we have agreed to hold the other parties harmless against losses arising out of intellectual property infringement or other types of claims.  These agreements may limit the time within which an indemnification claim can be made, and almost always limit the amount of the claim.  It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.  Historically, payments made, if any, under these agreements have not had a material impact on our operating results, financial position or cash flows.