# CyberOptics Reports Strong Second Quarter Sales
And Higher Than Forecasted Earnings;
Announces 500,000 Share Repurchase Plan

Minneapolis, MNJuly 26, 2006CyberOptics Corporation
(Nasdaq: CYBE) today reported strong operating results for the second quarter of 2006 ended June 30.

- Consolidated sales totaled $14,551,000, an
increase of 73% from $8,429,000 in the year-earlier period but down slightly from $14,718,000 in this years first quarter.
Second quarter sales were at the high end of the previously-issued sales guidance for this period.
- Operating income came to $2,469,000, up
significantly from $26,000 in last years second quarter and also up 34% from $1,842,000 in the first quarter of 2006.
- Net income came to $1,907,000 or $0.21 per diluted
share, up significantly from $202,000 or $0.02 per diluted share in the year-earlier period and up 31% from $1,456,000 or $0.16
per diluted share in this years first quarter. This years second quarter earnings, which were reduced by approximately
$0.03 per diluted share of stock compensation expenses, exceeded the previously issued financial guidance for this period.
Earnings in the second quarter and for the first six months of 2006 were taxed at an approximate 34% effective rate, reflecting
the reduction of the valuation allowance on deferred tax assets that occurred in the fourth quarter of 2005. Earnings in the
second quarter of 2005 were taxed at an effective rate of 26%.
- CyberOptics ended the second quarter of 2006 with
cash and marketable securities of $48,584,000, up from $43,547,000 at the end of this years first quarter and also up from
$41,140,000 at the end of 2005.

CyberOptics also announced that its board of directors has approved the
repurchase of up to 500,000 shares of its common stock in the open market for a one year period commencing July 31, 2006.

Kathleen P. Iverson, president and chief executive officer, commented:
Our strong sales and above-plan earnings were driven by robust demand for our electronic assembly sensors and the new Flex
Ultra automated optical inspection (AOI) system. In addition to increased sales of electronic assembly sensors to OEMs of robotic
pick-and-place equipment, our sensor operation also received another solid contribution from DEK International, which has embedded
our fiducial/inspection camera into its industry-leading line of solder paste screen printers.

Iverson continued: Since its introduction earlier this year, sales of
the Flex Ultra have exceeded our expectations, driven by the significantly enhanced features of this next-generation AOI system.
During the second quarter, we received an order, primarily for Flex Ultra systems, totaling nearly $900,000 from a large Asian
original design manufacturer that is the worlds leading producer of smart phones and PDAs. Systems worth $260,000 were
delivered in the second quarter, with the balance scheduled for completion in the third quarter. We also received a $400,000 order
for SE 300 solder paste inspection systems from a new memory DRAM or module customer for delivery in the third quarter. We believe
most of the worlds memory module

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producers are now CyberOptics customers, many of which are
standardizing on our inspection systems. Second quarter order bookings totaled $14,165,000, compared to $16,008,000 in this
years first quarter. As a result, we ended the second quarter with an order backlog of $7,805,000, compared to $8,191,000 at
the beginning of this period. Since the majority of this backlog is scheduled to ship in the third quarter and given our outlook
for new orders, we believe the third quarter should be another good period for CyberOptics.

Steven K. Case, Ph.D., chairman and founder, added: The new sensor,
system and semiconductor products that we have introduced over the past year have positioned CyberOptics to capitalize upon the
strength of our targeted capital equipment markets. We are particularly encouraged by the strong market reception accorded our
new, state-of-the-art Flex Ultra inspection system. As the next generation of CyberOptics line of AOI inspection systems,
Flex Ultra inspects for missing or misplaced circuit board components, solder joint quality and other defects at higher production
speeds with greater resolution and reliability than prior AOI models. The robust demand for this product also reinforces our
conviction that quality inspections of miniaturized components on todays surface mount technology circuit boards are
becoming an increasingly important consideration for manufacturers of electronic products. This trend plays directly into
CyberOptics technological strengths.

CyberOptics is forecasting earnings of $0.16 to $0.19 per diluted share on
sales of $14.0 to $15.0 million for the third quarter ending September 30. This guidance incorporates stock compensation expenses
of approximately $0.02 per diluted share.

About CyberOptics
Founded in 1984, CyberOptics is a recognized leader in process yield and through-put improvement solutions for the global
electronic assembly and semiconductor capital equipment markets. Headquartered in Minneapolis, Minnesota, CyberOptics conducts
operations in North America, Asia and Europe.

Statements regarding the Companys anticipated performance are
forward-looking and therefore involve risks and uncertainties, including but not limited to: market conditions in the global SMT
and semiconductor capital equipment industries; the level of orders from our OEM customers; the availability of parts required for
meeting customer orders; the effect of world events on our sales, the majority of which are from foreign customers; product
introductions and pricing by our competitors; and other factors set forth in the Companys filings with the Securities and
Exchange Commission.


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For additional information, contact:
Jeffrey A. Bertelsen, Chief Financial Officer
763/542-5000

Richard G. Cinquina
Equity Market Partners
904/415-1415

Second Quarter Conference Call and Replay

CyberOptics will review its second quarter operating
results in a conference call at 4:30 pm Eastern today. Investors can access a live webcast of the conference call by visiting the
investor relations section of the CyberOptics website, www.cyberoptics.com. The webcast will be archived for 30 days. A replay of the conference call can be heard through August
2, 2006 by dialing 303-590-3000 and providing the 1106645 confirmation code.

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# CyberOptics Corporation

Consolidated Statements of Operations (Unaudited)

|Three Months Ended June 30,                   |  | Six Months Ended June 30,
|--------------------------------------------- |  | -------------------------
|
|                                             
|Revenue                                       |  |                          
|Cost of revenue                               |  |                          
|                                             
|Gross margin                                  |  |                          
|Research and development expenses             |  |                          
|Selling, general and administrative expenses  |  |                          
|Amortization of intangibles                   |  |                          
|                                             
|Income from operations                        |  |                          
|Interest income and other                     |  |                          
|                                             
|Income before income taxes                    |  |                          
|Provision  for income taxes                   |  |                          
|                                             
|Net income                                    |  |                          
|                                             
|Net income per share  Basic                  |  |                          
|Net income per share  Diluted                |  |                          
|                                             
|Weighted average shares outstanding  Basic   |  |                          
|Weighted average shares outstanding  Diluted |  |                          
|                                             

# Condensed Consolidated Balance Sheets

|                                           |  | June 30, 2006 |   | Dec. 31, 2005
|------------------------------------------ |  | ------------- | - | -------------
|
|                                           | 
|Assets                                     |  |               |   |              
|Cash and cash equivalents                  |  |               | $ | 32,934       
|Marketable securities                      |  |               |   | 12,238       
|Accounts receivable, net                   |  |               |   | 8,533        
|Inventories                                |  |               |   | 8,703        
|Other current assets                       |  |               |   | 828          
|Deferred tax assets                        |  |               |   | 1,942        
|                                          
|Total current assets                       |  |               |   | 65,178       
|                                          
|Marketable securities                      |  |               |   | 3,412        
|Intangible and other assets, net           |  |               |   | 6,353        
|Fixed assets, net                          |  |               |   | 1,722        
|Deferred tax assets                        |  |               |   | 3,858        
|                                          
|Total assets                               |  |               | $ | 80,523       
|                                          
|                                          
|Liabilities and Stockholders Equity       |  |              
|Accounts payable                           |  |               | $ | 3,217        
|Accrued expenses                           |  |               |   | 5,821        
|                                          
|Total current liabilities                  |  |               |   | 9,038        
|                                          
|                                          
|Total stockholders equity                 |  |               |   | 71,485       
|                                          
|Total liabilities and stockholders equity |  |               | $ | 80,523       
|                                          
|Backlog Schedule:                          |  |              
|                                          
|3rd Quarter 2006                           |  |               |   |              
|4th Quarter 2006 and thereafter            |  |               |   |              
|                                          
|Total backlog                              |  |               |   |              
|                                          

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