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Irvine Sensors (NASDAQ: IRSN)- The Game Is On
Like the stray cat you fed who keeps
coming back, I'm coming back to Irvine Sensors for another meal
of potential profits. This will be the fourth trading alert on Irvine
Sensors since December 17th, and we've gotten a nice trade each time.
17th at $1.72 led to a subsequent move to $2.32. May
23rd's was the best, with the stock leaping from $1.19 to $2.13. June
23rd's led us from $1.54 to $1.95.
Despite having called a nice move
in the stock each time, on the whole Irvine Sensors has been a disappointment
since launching coverage last December. The stock is trading around the
same price it was then, and didn't really participate in the 40% move NASDAQ
made from early March to early June.
That may all change with today's
announcement as the company finally delivers the event I have been waiting
for- the event which could put the company on a new path to accelerating
sales and significant profitability. This is what I have been waiting for
since first writing about Irvine Sensors last December.
Before commenting on today's news
release concerning a whole new product line for the company, here are some
comments on yesterday's earnings news release.
June quarterly results came out yesterday
after the close. In my opinion, the results were a non event. There has
been moderate improvement across the board as compared to where the company
was last year at this time, but nothing significant to push the stock in
either direction. Since a high level of performance was not priced into
the stock, the market basically yawned at the event.
Revenues for the quarter were $2.4
million, down from $3.9 in the same quarter last year. However, because
of revenue recognition timing issues, the company is ahead of last year's
revenues for the first nine months of their fiscal year. Through the end
of June, they achieved $10.1 million in revenues vs. $8.7 million in the
same nine months the previous year.
Net losses improved considerably.
Their paper loss dropped from $5.4 million to $4.3 million during the same
nine months the previous year. At least half the losses were non-cash:
depreciation, stock options, etc.
More significant improvements showed
up in the balance sheet. Shareholders' equity improved from $3.6 million
at the end of the last fiscal year to $4.6 million.
The company is ahead of where it
was last year at this time. Revenues are 16% higher, and shareholders'
equity is 28% higher. Taken as a whole- not bad but not market moving.
Big News- Out Just After the Close Today
Irvine Sensors announced new
product introductions today which are designed to meet 21st century processing
needs; smaller, and faster for the next generation of hand helds and wireless
Computing power needs to take up
less space, while at the same time be faster and more powerful. As such,
the whole semi conductor industry is moving from the TSOP design
(Thin Small Outline Package) which has dominated semi conductors for a
decade to the smaller and faster BGA (Ball Grid Array) attachment technology.
For those non techies like me, using
has been described as taking an elevator up 80 floors in a Manhattan skyscraper.
The TSOP would be akin to traveling 80 blocks in Manhattan.
Today, just after the market closed,
Sensors announced the schedule for availability of the first of an
expected new line of stacked computer memory packages using BGA
Irvine Sensors’ initial product
offering is a package of two stacked Micron 256 Mb SDRAM
Double Data Rate (DDR) 333 MHz parts. This product has completed qualification
and is expected to be available for deliveries commencing in September.
A comparable product consisting of stacked Samsung DDR parts is
planned for release in the subsequent quarter.
Management at Irvine Sensors
feels it is far ahead of the curve in the next major wave of processing
and memory. They feel these new products will take the company to an entirely
new level in the next fiscal year, which begins October 1.
These microprocessors are the smallest
devices for their computing power on the market today. As such, they are
ideal for products where size is a critical factor. Look for the Irvine
Sensors' technology to be included in the cell phones, PDA's, ultra
mini computers, and other devices where size and computing power is critical.
I am both hoping and expecting to
be able to report significant sales announcements starting in the September
time frame. In short, these new DDR products are the reason this stock
could trade up dramatically in the coming months, and the reason to speculate
with ownership of this stock throughout the remainder of the year and into
2004. This is the potential home run. It's come three months after I expected
to hear about it, but nevertheless it's here now.
As you can see from the chart, Irvine
Sensors made a nice move from an April low in the $1 range to a May
high of $2.13. Since that time the stock has pulled back to a nearly perfect
50% retracement, and has been grinding between $1.40 and $1.70.
Monday's earnings release placed
the stock near the high end of its midrange, and positions the stock to
move much higher on the news.
I'm hoping we can have a repeat version
of the May trading alert which took us up about $1 from the low point.
Assuming the low end of the recent range is about $1.50, a target of $2.50
is not out of the realm of possibilities if this news announcement puts
some serious life into this stock.
Here are my thoughts for today's
Irvine Sensors is holding a conference
call tomorrow fifteen minutes after the market closes to discuss both the
June quarterly financial results and the new products they introduced today.
I strongly recommend you take the time to listen in. You can always catch
the replay at their corporate web site.
Buy up to $2
Short Term Target Price: $2.50 over
the next 30 days; Long Term target considerably higher if significant
sales start coming in on the new DDR components in September.
Stop Loss: $1.40- The last level
Simply visit their home page at www.irvine-sensors.com
to access a link to the live or recorded streamed version of the call.
Here is the complete text of today's
news release for your review:
Announces New Line of Stacked Memory Products
Tuesday August 12, 4:01
First Ball Grid Array (BGA) Product
Is Stack of Double Data Rate Parts
COSTA MESA, Calif., Aug.
12 /PRNewswire-FirstCall/ -- Irvine Sensors Corporation (Nasdaq: IRSN;
Boston Stock Exchange: ISC) today announced the schedule for availability
of the first of an expected new line of stacked computer memory packages
using Ball Grid Array (BGA) attachment technology. BGA attachments use
an array of solder balls for interconnects rather than rows of leads, thereby
using much less area and saving valuable mounting space on circuit boards.
Over the next several years, BGA attachment technology is anticipated to
be the successor to the industry-standard Thin Small Outline Package (TSOP)
packaging technology that has been used in the semiconductor industry for
over a decade. In response to this transition, Irvine Sensors is introducing
a family of stacked BGA parts that takes advantage of its patented technology
to permit the stacked package to use no more board space than a single
Irvine Sensors' initial
product offering is a package of two stacked Micron® 256 Mb SDRAM Double
Data Rate (DDR) 333 MHz parts. This product is expected to be available
for deliveries commencing in September. A comparable product consisting
of stacked Samsung® DDR parts is planned for release in the subsequent
quarter. The manufacturing processes utilized for both parts are comparable
and adaptable to stacking numerous other BGA packages. Irvine Sensors expects
to exploit this adaptability to expand its line to meet customer product
demands and has established a "quick turn" manufacturing process intended
to permit rapid response to customer requirements. Potential customers
are invited to submit requests for quotation on stacks of any commercially
available BGA packages. For information about pricing, schedule or product
configurations of BGA products, please direct inquiries to BGAStack@irvine-sensors.com.
The newly announced BGA
product line is in addition to Irvine Sensors' existing line of more than
two dozen different stacked TSOP packages. For information regarding Irvine
Sensors' stacked TSOP products, please direct inquires to TSOPStack@irvine-sensors.com.
Irvine Sensors Corporation,
headquartered in Costa Mesa, California, is primarily engaged in the sale
of stacked chip assemblies and research and development related to high
density electronics, miniaturized sensors and cameras, optical interconnection
technology, high speed routers, image processing and low-power analog and
mixed-signal integrated circuits for diverse systems applications.
Micron and Samsung are
registered trademarks of Micron Technology, Inc. and Samsung Electronics
Co. Ltd., respectively.
Safe Harbor Statement
under the Private Securities Litigation Reform Act of 1995: This news release
may contain forward-looking statements based on our current expectations,
estimates and projections about our industry, management's beliefs, and
certain assumptions made by us. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates," "may," "will" and
variations of these words or similar expressions are intended to identify
forward-looking statements. These statements include, but are not limited
to, our expectations regarding the market demand for our BGA parts and
our ability to qualify, manufacture and respond to that demand. Such statements
speak only as of the date hereof and are subject to change. We undertake
no obligation to revise or update publicly any forward-looking statements
for any reason. These statements are not guarantees of future performance
and are subject to certain risks, uncertainties and assumptions that are
difficult to predict. Therefore, our actual results could differ materially
and adversely from those expressed in any forward-looking statements as
a result of various factors.
Important factors that
may cause such a difference include, but are not limited to, general economic
and political conditions and specific conditions in the markets we address,
particularly as it might effect the status of our contract manufacturing
sources; the timing and successful completion of technology and product
development through volume production; the rate at which our present and
future customers adopt our BGA technologies and products; our ability to
raise additional capital; our ability to negotiate appropriate strategic
relationships; our ability to control costs and expenses; the potential
unforeseen impact of product offerings from competitors; and the general
economic slowdown in the technology sector and semiconductor industry.
Further information on Irvine Sensors Corporation, including additional
risk factors that may affect our forward looking statements, is contained
in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q,
our Current Reports on Form 8-K and our other SEC filings that are available
through the SEC's website ( www.sec.gov
Source: Irvine Sensors
Charts Provided Courtesy