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Non-Tech : Simula (SMU)
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To: Noblesse Oblige who wrote (1027)3/24/1998 10:06:00 PM
From: Paul Bowman  Read Replies (2) of 1671
 
Another point made on the call was that the Autoliv lawsuit would likely have some preliminary rulings this summer, and would not materially effect the profitability of the company due to litigation costs. They are very confident of a win.

Toward the end of the call a question was asked about future profitability. Management said it is comfortable with the .60 - .70 estimates for full year 98, but were not willing to commit to any big upswings in revenue for any of the businesses. The 16G business would be held to 3MM per month until late in the year in an attempt to control costs and improve margins. No obvious ramp up there. ITS was going to run at 5 - 6MM per quarter from BMW throughout the year, with the new "larger" customer making its first purchases in Q4 98. No obvious run up there. Government contracts and the rail seating business likewise will continue as is. So the question, how can SMU make .60 - .70 FY98 from a business-as-usual run rate if that means a break even Q1?

Townsend's answers were vague. What does the thread make of this? I'm left thinking (hoping) that SMU is counting on much improved revenues on the 16G side late in the year, and that they are counting on a significant ramp up of ITS and ITTR with the anouncement of new contracts though Delphi. They are afraid to make promises so are keeping their projections modest, but are counting on some big news later this year. What do you all think?
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