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

To: Noblesse Oblige who wrote (1100)	4/30/1998 11:07:00 AM
From: michael c. dodge	Respond to of 1671

Good discussion on the ITS by Wally. Is Autoliv still blocking sales ???

To: Noblesse Oblige who wrote (1100)	4/30/1998 12:38:00 PM
From: Noblesse Oblige	Read Replies (2) \| Respond to of 1671

To the "thread," Simula has reported better than expected first quarter numbers, with the company actually marginally in the black for the period. Most analysts, myself included, were expecting a small loss. There were some significant positives in the quarter that are more than one-time events. ITS sales to BMW continue to exceed expectations, and BMW has begun national advertising of the product. BMW itself indicates that it believes the better than anticipated number of auto sales it is achieving is largely due to the market's response to ITS. This should help us in our effort to get additional car companies to sign on for head protective device. Most salient in the quarter, however, was the dramatic improvement in 16G manufacturing efficiencies. Despite the fact that the company hasn't yet consolidated its San Diego manufacturing facilities (and will not do so until the latter part of the current quarter), Simula made progress by reducing direct labor manufacturing costs 15% and material handling expenses by 19%. The company has indicated that it now takes 12.5 hours of labor to produce one seat pack (typically 3 seats), but that over the balance of the year, this should be reduced to about 7 hours. Profitability has now been achieved in 16G, and it should be dramatically improved on for the entire balance of this year. Beginning in either late 1998 or early 1999, however, Simula will be able to ramp up the amount of 16G production from the current level of about $ 3 million per month. Some time during 1999, I expect that sales of this product will be closer to $ 5 million per month. The "risk" parameters in this stock have finally changed, and it is clear that based on existing 16G business improvements and the expected growth of already signed ITS agreements, that the shares are at least worth the current price. What would make this stock a gigantic winner is additional ITS contracts. We have no direct evidence of imminent signings, but the portents are positive. As I have written before, Simula now has a contractual agreement with Delphi for the sale and marketing of ITS, TRW is on Simula's Board, and Breed's President was on Simula's Board until he felt compelled to leave because of the lawsuit against Autoliv. In fact, Simula now has relationships with all four of the important first tier suppliers. My estimate for second quarter earnings is about seven or eight cents a share. Following the San Diego plant consolidation, however, we should see a significant improvement in the numbers. For the remaining two quarters of the year, I would expect something in the 15-20 cent and 25-30 cent ranges, respectively. We have finally gotten over the "hump" and trading in the stock should settle at a new, higher level. Once we get the first incremental order in ITS, as my father used to occasionally tell me, we will be "off to the races." Have a good day.