Greetings,
Here's a summary of what I thought was important from the IRSN
annual stockholders meeting held last Friday:
-Jim Evert closed on a house in the Costa Mesa area. He obviously
is committed to leading this company for a couple of years
-Vermont operation is closed but company must replace the portion of revenue generated in Vermont by growing the rest of the Costa Mesa
operations
-Third and fourth quarter revenues depend largely on what happens to Microsensors, Inc subsidiary as well as Microelectronics Product
Division
-They have record sales, they have several contracts pending, and
they enjoy the largest business backlog in history
-Even John Carson's Advanced Technology Division (ATD), the
innovative core of the company, is producing earnings...ie- No one is
getting free lunches anymore!!
-EG&G just converted their Microsensor Inc contract into a $2M per
year, multi-year contract because they like what they see so much
-Company has cut their memory stacking overhead costs by $1M.
Reduced head count from around 140 people to 60 people in the
restructuring
-Future may include exciting share holder opportunities like
spinning off Microsensor Inc as an IPO
-ATD is growing 20% year and includes the following projects
(E-Film, wearable computers, flexible electronics, photo optical
intelligent switching devices and advanced image processing with the
VIP/Balboa project
-E-Film briefed:
--Currently developing a working prototype for a late March
trade show debut
--Resolution of 1.3M pixels growing to 5 M pixels within a
year. Current digital cameras costing $600 have 600,000 pixel
resolutions
--Company will price at what the consumer will pay but believes this will be around $1000
--There are currently 800M 35mm cameras on the market, with an
additional 60M produced each year. Potential market place for the EFS-1 film project is obviously large if the consumer decides they like the idea
-Wearable computer project receives a contract tomorrow from a large well known American company. This project involves what they called Neochip technology which puts the equivalent of Pentium computers in the palm of your hand. It allows the US Army to become the digital fighting force for the 21st Century as well as having medical, industrial and game applications associated with virtual reality devices
-Floyd Eide briefed Microelectronics Division. Goal is to "fill the gap in IRSN memory stacking operations" with numerous derivative
products from their high end military and space application products.
Floyd left Dense Pac, an IRSN competitor in 'low end' memory stacking.
Since he owns all of the patents used by Dense Pac, this was viewed
favorably for IRSN. He has now applied for 5 new patents for IRSN, four of which will be introduced in new products this year. They will attack (his words) all market segments this year from government niche products to commercial low cost, including TSOP's
-Novalog briefed as having great growth potential for this year.
Worldwide market described like this. 85% of all notebook computers
have adopted IR data ports. Desktop and printers are not there. When
they get there, they will provide the sales opportunity for 250M IR
transmit/receive devices per year. Novalog currently designed into
Panasonic, Sharp and Casio. Talking to Erickson, Motorola, Qualcom, and Nokia for other hand held device projects. Last year's overall
worldwide market was 18M growing to 33M this year. Novalog sold 1M
devices of the 97 market and expects a minimum of 2 M devices sold in
98. Only company with Mini Ser Tel which serves the telephone and pager market. Novalog has already received a 50,000 unit contract for SkyTel pagers.
-John Murray briefed Microsensor, Inc subsidiary of IRSN. Very
dynamic guy. Great vision of where he wants to be. John's philosophy:
The Customer Drives the Company. Worldwide market is 1B today growing to an estimated 13B per year by 2004. Highlights...Micro Silicon Ring Gyro, universal capacitance readout chip and custom ASIC's (Application Specific Integrated Chip)
--Automotive industry alone has a 450M/year market need for
microsensors. Other industries include but are not limited to medical
products, toys, package shipping (UPS, Fed EX, Airborne Express, and
DHL) and of course, the military
--Sony has publicly stated they could use a device like the
micro silicon ring gyro in their gaming devices. Sony believes they
need about 100M Microgyro devices/year if they can buy them for less
than $16 each
--Ford alone has said they would buy devices like this if they
can buy them for less than $50 each. Cars take anywhere between 4 to 6 of these depending on how many airbags they have. IRSN's gyro is the size of a fingernail and replaces softball sized controllers which cost $750 each. Additionally, each car has the requirement for 50 to 100 microsensors readout devices. You can see, the market potential is huge. Car company's buy gyro's in lots of 300,000!!
--Microsensors are the enabling technology for systems of the
future. Microsensor, Inc (MSI) is nearly ready to explode on the scene in a few short months. The micro silicon ring gyro is currently
undergoing testing at the Jet Propulsion Lab in Pasadena, Ca. The lead test engineer has described it's design as "bulletproof". Independent assessments tell the company they are 6 months to 1 year ahead of the nearest competitor.
--Price and function are the keys to success in this market.
John Murray is the right guy for this unit of Irvine sensors.
-Problems which IRSN must overcome
--Novalog products have had a slower adoption rate than
originally forecast. Microsoft was slow to provide software. The
wireless world is coming, oddly enough being driven by Asian consumers
before American consumers. It will catch hold eventually, and the
company will be poised to exploit it. They did a great demo of taking a digital picture, shooting it over to a computer monitor, and then to a printer which produced a copy. Cool stuff...No wire hookups necessary.
--E-Film is on the verge of a success. John Carson is leading a limited partnership.
--Microsensor, Inc needs additional money. Several groups want to help. John Murray will chose an option which best satisfies the needs of MSI, the investors and the share holders.
--There have been some possible Patent violations by IRSN
competitors using IRSN intellectual property rights. Once IRSN's fiscal status improves, they will begin legal action against some of these companies. It takes money to sue and work through the legal system before you recoup 'your upfront investment'. This will provide a future revenue stream.
-- Flash memory has shrunk from 15 ml thickness to 1 ml
thickness because of a proprietary IRSN technology. This allows one to develop 'flexible' electronic components. Market place is wide open. IRSN needs more money to pursue these ideas. Some money they are getting from government projects but they will need more money to
exploit it commercially.
-Projection
--No growth in '98 due to closeout from Vermont. Improved
fundamentals. Debt reduced from $6M to $500,000 already.
--$25 M in sales potential in 99. (50% growth)
--$50 M in sales potential in 2000. (50% growth)
--Even Better in 2001
Hope you enjoyed reading this as much as I did hearing it,
Migdriver |
