As a direct result of the Agreement, SMS expects material revenue growth across its platform of products in the future. Importantly, due to the Company’s extremely high operating leverage, SMS also similarly operates at an extremely high revenue margin. This is due to a number of contributing factors, including, but not limited to:
- Sensor production volume is highly scalable with the addition of low-cost/high-output, laser cutting machines
- Current production facilities have material, embedded excess capacity. Thus, significant output increases can be realised with negligible effect on direct operating costs and total overhead
- The likelihood of a third-party, high profile organisation completing on-site airline operator installations, training and support in the future
- with limited input required from SMS and/or AEM personnel. SMS already has an MoU agreement in place with Testia, an Airbus Group Company –that is highly suited to performing such a role
SMN Price at posting:
$1.81 Sentiment: Hold Disclosure: Held
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