Annual Report President's Letter
April 15, 2002
To our Shareholders,
2001 was one of the most difficult years economically for the electronics
assembly and semiconductor industries. This being the case, our financial
performance for the fourth quarter and the year fell below our projections and
expectations. As a result, we have made every effort to streamline our
operations and reduce fixed costs to preserve our strong cash position. This has
been achieved through eliminating redundancies in labor and combining our sales
and marketing force to leverage synergistic opportunities in both our motion
control and communications product lines.
All market indicators are pointing to the start of an economic rebound in
the semiconductor industry, which will then lead to a rebound in the electronics
assembly industry. We have seen this as we have talked to our customers and have
been reassured that machine production and shipments are rebounding. As our
original equipment manufacturers (OEMs) begin to ship equipment with Cimetrix
software, we will see an increase in our licensing revenues, which ensures the
long-term financial success of the company.
In 2001, we added 14 new OEMs to our customer base. The company has made
significant strides in gaining market share, especially in the semiconductor
industry and has reinforced its position as a market leader in the surface mount
technology (SMT) industry. By building momentum in these industries, we have
focused our sales force on gaining new customers utilizing both our motion
control and communications products. It is our goal to become a total
integration partner with OEMs to provide the "power inside the machine".
Opportunities for Future Growth
Cimetrix is well positioned to capitalize on the projected market rebound.
In the semiconductor industry, our Connect and CIM300 product families are
considered the best technical solution for equipment connectivity. These
products were nominated by our customer, Bede Scientific of England, and were
awarded the Editors' Choice Product of the Year by one of the industry's most
respected trade publications, Semiconductor International. See Cimetrix release
dated December 13, 2001*.
In 2001, the semiconductor industry's migration to the larger size 300 mm
wafers had significantly slowed due to the weak economy, but according to the
Semiconductor Industry Association (SIA), capital equipment expenditures in 2002
for 300 mm wafer fabrication facilities are on the rise. In order to capitalize
on this market shift, we have reinforced our technical support team and focused
our sales and marketing efforts by reallocating regional sales and support
personnel in the United States and Europe. This is augmented by our existing
distribution and support partnerships with M&M Software GmbH in Germany, and
Noah Corporation and Lapole Systems, Inc. in Japan.
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Cimetrix CODE product family maintains its leadership as the strongest open
control software product on the market. The company continues to push the
industry forward with its introduction of Cimetrix Open Development Environment
version Six (CODE 6) with Core Motion technology. This allows our customers
flexibility, reduced hardware cost and protection of intellectual property. See
Cimetrix release dated October 23, 2001*. In the SMT industry, the demand for
more flexible software solutions has allowed Cimetrix to achieve long-term OEM
agreements with three of the top five SMT OEMs.
Commitment to Shareholders
We are committed to strengthening the relationships that Cimetrix has with
its shareholders. As part of this commitment, we have placed an email login on
our website. By registering your email address, you will receive regular
information about the Company's progress and its business activities. We will
also institute a quarterly conference call to review the company's financial
performance from the previous quarter. This will begin in June and will
correspond with our annual shareholders meeting. We are also confident that the
solid business structure put into place will begin to move the company forward.
As the company grows, we expect the price of your shares to increase
accordingly. We remain committed to achieving all requirements in order for the
Cimetrix stock to be listed on Nasdaq.
Goals for 2002
For 2002, we have set goals that will keep the company on track with
long-term financial projections. These goals are as follows:
o Gain 12 new OEM design wins in 2002.
o Continue to achieve every product goal on our technical roadmap to ensure
that Cimetrix's products are first to market and technically superior to
our competitors.
o Focus sales and marketing efforts on multi-industry use of all Cimetrix
products, especially with our current customer base in the semiconductor
and SMT industries.
o Reinforce our technical support of current customers,ensuring long-term
relationships with the company.
Sincerely yours,
Robert H. Reback
President and Chief Executive Officer
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* All Cimetrix press releases can be viewed on the company's website located at
www.cimetrix.com
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