Coreco reports 4th quarter earnings

MARCH 11--Coreco Inc. (Montreal, QC, Canada; www.imaging.com), a provider of computer-vision solutions for the OEM and end-user markets, has announced its results for the fourth quarter and year ended December 31, 2003. Fourth-quarter revenues increased 4% to US$4,973,604 from US$4,785,013 in the same quarter last year. The gross margin improved to 61.2% of revenues from 56.6% last year, reflecting the benefit of greater operating efficiencies achieved over the last two years.

Net earnings in the fourth quarter almost tripled to US$702,096 or US$0.10 per share from US$266,829 or US$0.04 per share last year. This increase was partially due to a tax benefit of US$0.04 per share as a result of the strengthening of the Canadian dollar versus the US dollar. Excluding this effect, net earnings would have been US$435,430 or US$0.06 per share compared with US$266,829 or US$0.04 per share in the fourth quarter of last year. Coreco has been reporting in US dollars since 2001. The strengthening of the Canadian dollar in 2003 has therefore had limited impact on operating costs. However, because the Company's Canadian operations pay income taxes based on earnings in Canadian dollars, the weakness in the US dollar versus the Canadian dollar has translated in a tax benefit to the Company.

For the twelve-month period, revenues decreased slightly to US$19,025,777 from US$19,272,638 last year, largely attributable to a soft first quarter in 2003. The gross margin improved to 59.0% from 56.2% of revenues, and net earnings rose to US$1,184,254 or US$0.17 per share, from US$939,526 or US$0.13 per share in the previous year. Excluding the effect of the tax benefit, net earnings would have been US$0.13 per share in 2003. Year over year, 2003 revenues from Asia increased by 35% to $4.5 million from $3.4 million last year, while European and North American markets remained generally slow. In 2003, Asia accounted for 24% of the company's total sales, Europe for 28%, the US for 45% and Canada for the remainder. New products continue to generate higher revenues, accounting for 79% of total revenues in 2003. By product category, sales of frame grabbers, embedded products and software represented 54%, 37% and 6% of sales, respectively, with end-user products making up the remainder.

Commented Keith Reuben, CEO of Coreco Inc., "This is a reflection of what we are seeing in the industry at large. The markets for machine-vision products have been improving gradually since the last half of 2003, with the semiconductor and electronics industry in Asia leading the way. Increased activity in the USA leads us to believe that North America will soon follow."

Coreco Inc. designs, develops, manufactures, and markets hardware and software that help enhance the productivity, quality, and cost-competitiveness of manufacturing processes. The company serves two target markets: OEMs and end users.