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Non-Tech : Simula (SMU) -- Ignore unavailable to you. Want to Upgrade?

To: wally who wrote (722)	10/31/1997 3:13:00 PM
From: Noblesse Oblige	Read Replies (2) \| Respond to of 1671

Hi Wally, I think the time may be "close" as well. All commentary to NHTSA had to be filed by earlier in the week, so my guess is that NHTSA will have something further to say on Standard 201 within the next 30-60 days. Following that, it is likely that we will start to see some auto companies or first tier suppliers sign agreements with Simula. I base this judgement on my assumption that at least a small portion of them will want to include ITS either as an option or as regular equipment on some of the 1999 auto models. As you know, for there to be adequate time to meet engineering requirements and planning for the "mid-1999" model year, the auto companies must begin planning at least 15 months prior. At the moment, it is clear to me that the activity (or lack of it!) in the stock is related to "fear" regarding the third quarter numbers, which are expected to be reported within two weeks. It seems clear to me that they will be a "disappointment" to many obvservers, as SMU investors had good reason to believe that the third quarter would be the swing quarter in the company's fortunes, providing a very solid profit for the first time in (what must appear to some!) eons. Nevertheless, it is worth noting that the 16G seating business has grown ten times in revenues in just the last 6 months, obviously exceeding even our most bullish conjecturing. With that growth has come some management difficulties (not unlike those that Boeing is suffering), but it is clear that the seating business is not fundamentally flawed. Moreover, it appears clear that whatever "indigestion" impacted the third quarter is well on the way to being healed, with full resolution likely as soon as the multiple San Diego plants are consolidated at the end of the first quarter. In the meantime, patient investors are just that: Patient. With a significant body of opinion...be it insurers or NHTSA...coming around to noting the effectiveness of Simula's advanced protective technologies (ITS), it is just a matter of time until that portion of the company's business becomes much more important than the remainder when arriving at the "value" of the total business. It certainly pays to note, as Steve Slawson (over at Brean Murray) has frequently indicated, that in a few years 75%-80% of Simula's total revenues (and certainly virtually all the profits) will come from businesses that weren't even producing product as recently as 1997's first quarter. That will indeed be solid growth in the view of any observer. Have a good weekend, all.