Essex's imaging device starts to pay off

Laser processor helps offset decline in work for Motorola

October 15, 1999|By Greg Schneider | Greg Schneider,SUN STAFF

The third quarter of 1999 was kind to Columbia's Essex Corp., a small technology company that has fought to become profitable.

Essex reported net income of $116,000, or 3 cents a share, on revenue of just over $1.3 million for the three-month period that ended Sept. 26. That was up from net income of $67,000, or 2 cents a share, on revenue of $1.27 million for the comparable portion of 1998.

The numbers improved despite the fact that work is declining on certain types of contracts -- satellite communications support for Motorola -- that had been sustaining Essex through previous rough patches.

The Motorola contracts involved creating software for the Iridium and Teledesic networks of communications satellites. Both of those projects are suffering financial and scheduling problems, and the work being contracted to Essex has suffered.

The Motorola contracts accounted for 72 percent of Essex's revenue for the first nine months of 1998, but for only 54 percent in the first nine months of this year.

Taking its place has been increased business involving the company's top product, the ImSyn image processor, Essex said. The ImSyn is a patented device that uses a laser beam to make certain types of image-processing calculations faster than ordinary computers.

Essex has scraped to find the resources to stay in business long enough to market the ImSyn for what it believes are a wide variety of potential uses, from medical imaging to exotic radars.

The struggle appears to be paying off; the company's backlog of business increased to nearly $1.5 million at the end of this year's third quarter, from $831,000 at the end of the second quarter.

"Increased work in the optoelectronics computing system area more than offset the decline in [satellite communications] revenues during the 1999 third quarter," the company said in a statement.

That offset should continue through the rest of the year, the company said.

"Despite our modest size and pocketbook, we are optimistic that our entrepreneurial edge will serve our stockholders well in terms of improved growth and financial performance," said Harry Letaw, chairman and chief executive officer of the 50-employee company.

Essex's long-suffering stock responded yesterday with what amounted to a modest rally, gaining 6.25 cents to close at 68.75 cents per share.

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