11/3/2003 - Coreco Inc. (TSX: CRC), a leading provider of computer vision solutions for the OEM and end-user markets, announces its results for the third quarter and nine months ended September 30, 2003.
Third-quarter revenues of US$4,765,776 compared favorably with US$4,737,739 in the same quarter last year. The gross margin surpassed 60%, versus 58% last year, as the Company continues to reap the benefit of operating efficiencies. Likewise, net earnings in the third quarter improved to US$274,410 or US$0.04 per share, from US$233,396 or US$0.03 per share last year.
For the nine-month period, revenues decreased slightly to US$14,052,173 from US$14,487,625 last year while the gross margin improved to 58% from 56% of revenues. Net earnings amounted to US$482,158 or US$0.07 per share, compared with US$672,697 or US$0.09 per share in the previous year. During the first nine months of 2003, the Company's investment in the development and marketing of products for the end-user market represented a negative contribution of US$0.21 per share, without which earnings would have been US$0.28 per share.
The recent strengthening of the Canadian dollar has had limited effect on the results of the Company in fiscal 2003. Coreco has been reporting in US dollars since fiscal 2001.
At September 30, 2003, the Company held US$2,871,469 in cash offset by long-term debt of US$343,750, for a net cash position of US$2,527,719. Working capital was healthy with inventories below 2002 year-end levels.
During this quarter, sales to Asia gained 27% over the same period last year and 40% for the year to date as a result of sustained improvement in the semiconductor and electronics industries. In other geographic markets, sales to Europe picked up 9% over last year while sales to the U.S. and Canada continued to be relatively soft. In the first nine months of 2003, Asia, Europe and the U.S. accounted for 23%, 28% and 46% of total sales, respectively, with Canada contributing the remainder. By product category, sales of frame grabbers, embedded products and software represented 52%, 39% and 6% of the total, with end-user products accounting for the remainder.
Strategic Partnership Opens New Markets and Applications for Smart Cameras
During the third quarter, Coreco signed a multi-year strategic agreement with Tokyo Electronic Industry Co., Ltd. (TELI), a subsidiary of Toshiba Corporation, to supply its smart camera technology to TELI as well as to collaborate on the development of new products and applications for the industrial automation market.
Under this exclusive supply agreement, Coreco's smart vision expertise, developed by the Company's Intelligent Products (IPD) group, will be customized and packaged with TELI's leading sensor technology to meet the specific needs of TELI customers. Marketing and sales of the combined product will be carried out through TELI's network in Japan, Europe, North America and Asia, providing Coreco's IPD group with worldwide coverage. The initial product launch scheduled for December 2003 is on target.
"During the third quarter, we continued to see a rally in virtually all our markets," commented Keith Reuben, CEO of Coreco Inc. "Year-to-date sales to Asia are almost 40% higher than the same period last year, and sales to the U.S. have grown sequentially since the beginning of the year. Design-win activity has also been strong providing us with added assurance that demand from our OEM customers is gaining in momentum."
"As for our end-user products, our emphasis in this quarter has been on establishing distribution channels outside the U.S.," added Mr. Reuben. "The agreement with TELI is an important milestone for us because it gives us instant access to the Asian market and positions us to benefit from new opportunities in this geographic region."
Coreco Inc. is a leader in the design, development, manufacturing and marketing of hardware and software that help enhance the productivity, quality and cost-competitiveness of manufacturing processes. The Company serves two target markets: Original Equipment Manufacturers (OEMs) and End-users. The OEM group provides a full range of frame grabbers, embedded products and accompanying software for integration in high-performance machine vision applications in the industrial vision, medical imaging, multimedia and surveillance markets. The Intelligent Products group (IPD) specializes in providing user-friendly, cost-effective vision appliances for task-specific factory floor applications, such as gauging, high-precision alignment, inspection, assembly verification and machine guidance. Coreco employs a staff of 135 people and has operations in Montreal (QC), Vancouver (BC), and Boston (MA), with additional sales offices in Cleveland (OH) and San Juan Capistrano (CA).
This press release contains statements that are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. The Company has no intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise.
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