Hi Jaime...
It should be noted that Simula certified 8 16G seats in the fourth quarter, 4 in the first quarter, and will only have 1 in the second quarter.
Each seat certification costs roughly $250,000, so the first quarter resulted in a $1 million savings vis-a-vis the fourth quarter, and the second quarter will have a $750,000 savings vis-a-vis the first quarter.
Thus, all things being equal, Simula should earn an additional $750,000 pretax in quarter two above and beyond quarter one's numbers. With taxes at 40%, net will be up $450,000, or between four and five cents a share versus quarter one.
Hence, earnings will likely move up from a couple of pennies in quarter one to 7-8 cents in quarter two, and that is prior to any further improvement in operations in San Diego.
It is my opinion that the earnings estimate made in the company's press release is a "low ball" estimate. To add 15 cents to the bottom line, all that is necessary is that the San Diego operation perform the same as in the first quarter (no improvements) but without any certification costs other than one seat a quarter for the balance of the year. As they say, "A piece of cake."
It isn't unreasonable to assess profits coming in at roughly 50 cents for the year, the best showing since I have been a shareholder (and I am a long term holder, that is for sure <G>).
It has been a very tough nine months, but the investment made in the certification of new seats will eventually pay off. I think we are seeing the turn made even as we speak.
Finally, too. And, I assure you, not a moment too soon for my sanity.
Have a good day. |
