More irons in the fire for SEMX!
SEMX's stock price should continue to climb as investor
awareness about its new golf club business increases.
In late January, SEMX announced its contract to sell copper
tungsten sole weights to Taylor Made for their premium line of
Titanium Bubble 2 irons. However, until SEMX's post-earnings
release conference call last week, I didn't realize the golf club
deal's significance for SEMX's revenues and earnings.
Frank Polese, who heads the SEMX division selling the sole
weights, estimated during the conference call that the first
order from Taylor Made would involve about 300-600,000 sole
weights at $5-$10 per weight. (The titanium clubs will go on sale
in September, but I've already seen Taylor Made ads mentioning
the copper tungsten sole weights.)
Using the average of Polese's numbers, they compute to almost
$3.5 million in revenues -- a nice chunk of change for a small
company like SEMX (SEMX's 1996 total revenues were $46 million).
But, according to Polese, the initial Taylor Made order could be
just the beginning.
He indicated there's the possibility Taylor Made will buy
SEMX's copper tungsten sole weights for use in its lower-cost
clubs, where potential revenues would be many times higher. And,
added Polese, other golf club manufacturers could also be
interested in using the copper tungsten weights.
As an SEMX shareholder, I'm excited about the potential for
their golf club business. I also admire management's creativity
in adapting their copper tungsten alloy technology from its
original function (heat dissipation in computers and other
electronic products) to a very different and profitable market. |
