To the "thread,"
Simula has announced that it has become a "First Tier Supplier" to the Boeing Company. In addition, a closer relationship with Airbus, Boeing's principal competitor, will have Simula place management personnel outside of that company's final manufacturing plants in both Germany and France.
The announcement is further confirmation that Simula's recent plant consolidation has left major manufacturers more certain of the company's ability to meet production schedules.
Moreover, it puts into perspective reports that Simula is about ready to "pump up the volume" on 16G production. I continue to expect that the fourth quarter will be "transitional" with this sales uptick, moving the company from its current $3 million monthly production schedule to a more aggressive $4 million. For 1999, I expect that production will settle in at approximately $5 million a month.
The staged increase is unquestionably designed that way in order to minimize any manufacturing disruptions as Simula pushes volume higher. In this way, the company hopes to reduce any risks that its manufacturing processes are "strained", thus avoiding the problems associated with the rapid business buildup that Simula suffered in late 1997.
All in all, very good news, and confirmation that this division is moving directly to a more active level of revenue production. Now we need management to create the anticipated profit margins. But, the raw material to do that...fundamentally strong demand for Simula's product line...means that its performance is moving rapidly in the right direction.
Have a good day. |
