I agree, the Hoffman deal was another coup for Wayne Case. He got the
number 1 inter-spindle balancing co in Europe for a bargain basement
price, since the parent co was bankrupt. The entire deal should pay for
itself in a couple of quarters, as SMIT discontinues Hoffman's exterior
mounted balancing production facilities in Germany, and cross sells
the SMIT product into Europe and the Hoffman product into the US.
I spoke with Linda last week, and earnings should be released around
the 27th, similar to last year. She said the earliest they would possibly
come out would be the 20th. I too am anticipating a positive surprise.
The firm announced a record October, and I expect November to be even
better. Why? Because not only is Veeco ramping up sales, but it was the
last month for the old marketing firm (Medtron?) to close up any deals
they had in the works. Red Chip Review originally forecast .10 for the qtr,
then revised it to .05 after getting burned by 1Q97. I believe they had it
right the first time.
I'm equally bullish on the longer term, but only consider the helicopter
deal an added bonus if it comes through - which it eventually should.
The real kickers will be twofold: 1) Seagate Technologies has asked
SMIT to develop a laser inspection machine that would not require any
human intervention to get the material through the inspection. Imagine,
we may one day actually see every disk and chip with an "Inspected by
Schmitt Industries" on it, as SMIT gets a realtime, assembly line version
of their product. Wayne says the initial version will be ready in the next
4 - 6 months, and Seagate has purchased 5 standard machines in the
meantime.
The second, and even greater kicker which could make this company a
key player, is some work they are doing with National Semiconductor.
Apparently the NS guys were in Schmitt's lab for a full week, measuring
the etched lines on actual chips down to .1 angstroms. Now I'm out of
my league talking about this stuff, but have been told that this precision
of measurement has been one of the major stumbling blocks for developing
the next generation smaller chip. Were Schmitt to have a patent on a
technology necessary for any chip mfr to be competitive going forward,
well name your price for this little upstart company from Portland. |
