Newsletter

Trading Alert- Irvine Sensors - Major News

August 12, 2003
Volume VI, Issue 77
Email : info@otcjournal.com
URL : http://www.otcjournal.com

To OTC Journal Members:
 

Trading Alert- 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. December 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

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.
 

The 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 applications.

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 BGA 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, Irvine Sensors announced the schedule for availability of the first of an expected new line of stacked computer memory packages using BGA attachment technology.

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.
 

Trading Alert

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 trading alert:

  • 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 of support.
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.

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:
 

Irvine Sensors Announces New Line of Stacked Memory Products

Tuesday August 12, 4:01 pm ET 

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 device. 

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 Corporation



 


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