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

To: sari staver who wrote (1127)	5/23/1998 1:23:00 PM
From: Noblesse Oblige	Read Replies (1) \| Respond to of 1671

Hi Sari... I don't think the weakness is related to the Toyota "curtain." First off, it is very difficult for American companies to sell product in Japan, so I am not sure that the choice of curtain technology has anything to do with other than the preference for a home grown product. That aside, holders of Simula stock have always assumed that we wouldn't get 100% of the side-impact, head-protection market. Assuming that eventually all cars will have some sort of device (which is clearly much safer than mere padding, which doesn't do anything to protect you against intruding items), for just the front seat, over 100 million units will eventually be sold annually. (With the back seat thrown in, my guess is that the potential is probably fairly close to 200 million units annually). Current ITS pricing is about $25-$30 per unit, depending on quantity ordered. The curtain is slightly higher. So, the total market may well approach $ 4 billion annually. If Simula got 5% of the market, that would amount to $ 200 million in annual sales, pretax profit margins would result in untaxed income of abou $ 50 million, or about $ 2.50 per share the way the balance sheet is now configured (fully diluted). Obviously, twice the market share delivers twice the income, and I have specifically chosen a low figure to point out the considerable potential. In addition, it is clear that the balance of the ITS family of products will have good potential, too. For starters, you can take it to the bank that Breed will eventually be selling Simula's ITTR (certainly for back seat applications), for which the market is even larger. We don't have to get every order to be successful. Right now, the market is focusing on the fact that we haven't had a new order in years. Once we get one, the stock will trade very differently. And, if we are fortunate enough to get a handful, the shares will make you "rich" beyond your wildest dreams of avarice. My hope is that we have the opportunity to buy shares in the auto products portion of Simula as a standalone business. For this to happen, management has to spin at least a portion of it off to shareholders, something that I think is increasingly likely following the move into profitability for 16G seating AND the signing of at least one additional ITS order. Have a good evening.