Ok, as promised, I have some information on SMTL. I did manage to get in contact with Mr. John Sullivan at SMTL. He's the investor relations person at the company. More on this later.
I asked Mr. Sullivan about the growing order backlog. At the close of the quarter ended June 30th SMTL had a standing order backlog of 110 million dollars. I was informed that the backlog now stands at around 65 million (if memory serves me correctly). I wondered why it had shrunk so quickly and asked if order cancellation had a part to play in this. If I recall correctly, 20% of the decrease can be attributed to order cancellation. This isn't something to be alarmed about, because double-booking is common-place in the semiconductor industry. Also, keep in mind that the book-to-bill ratio is just starting an upward move, so customers could have postponed or canceled orders fearing a slowdown in the industry.
The work-force reduction that was undertaken by SMTL was a proposed 10% cut. I wondered, and asked, isn't this a counter-productive move if SMTL is trying to fill the order backlog(?)... Mr. Sullivan informed me that the cut was a basic adjustment to compensate for their projections of a slight reduction in the amount of work/orders they'll be receiving in the near-term future. That did make me a little nervous, but then again, it does show that the company is keeping things like that in mind, and isn't afraid to act on those expectations.
On their most popular product(s), the Magnum automated batch chemical tool accounts for the largest share of product-on-back-order. The Express vertical furnace comes in behind it. I think the development of the vertical furnace was one of the reasons that I moved into SMTL. It does show alot of potential as semiconductor manufacturers require shorter and shorter delays in producing their product.
I wish I had better recall for most of his answers, I tend to get a little nervous when quizzing these people (grin). He seemed very honest in his replies to my questions. You can reach him at (406) 7752-2107 with your questions. Please post the replies if you do (take notes, sometimes it's too much to remember all the information they give... and this information could mean the difference between getting out in time, or taking a long ride down with the company).
One more thing, I did ask Mr. Sullivan if there was an electronic way to reach them, and he said there really wasn't. They have no web-site at this time, and phoning seems to be the quickest and most direct way to get your questions answered.
If you've never phoned up the investor relations people at a company it should be something to try. Line up a few pertinent questions that you feel haven't been answered and give the company a call. You are a shareholder and you do have the right to have any reasonable questions answered. This isn't to say that they'll be able to answer all questions, such as possible future contracts, etc.
Oh, what am I doing with SMTL? As suggested this does seem to be a good time to average-down. The stock is cheap, and semi's are here to stay. Check out the number of companies that are planning on opening up new fabs. AMD, INTC and many others have definite plans to build new plants domestically and abroad. This translates into new and modern equipment.
Patience, I hope, will pay off in the long run. Hope this helped out.
Osiris G. Martinez
geronimo@shadow.net |
