Sigma Labs Inc (SASI)

[monkeybuilt]

Here's a simple and what I consider realistic SGLB earnings estimate regarding the LEAP nozzle. This is why I'm comfortable at our current PPS until things pick up.

We now have enough information to put a realistic WAG of what PrintRite3D is worth when applied as a value based model for the LEAP nozzle and it will not meet many of the expectations I've seen discussed lately...at least in the near term.

We know the production capacity of the new nozzle plant.
http://www.geaviation.com/press/other/other_20140715.html

There will be almost 20 fuel nozzles in every LEAP engine produced, thus setting the stage for high, long-term production volume at the Auburn plant. Production will ramp up quickly over the next five years, going from 1,000 fuel nozzles manufactured annually to more than 40,000 by 2020.

The other piece is the cost per nozzle. Although I can't find it now (and will be chastised for sure because of it), the cost of each nozzle was somewhere around $1300. Somebody on this forum surely can help point me in the right direction to this source. I know it is out there.

So...40000 x $1300 = $52M per year for part cost. Let's assume that this is the cost while using PrintRite3d which saves GE 25%. So without PrintRite3D, it would cost GE more like $69M. Using a value based method and assuming 5% (which might be a bit high), SGLB could see about $3.5M of that per year. Let's now assume that 30% of that translates into SGLB earnings. That comes out to be about $1M annually. If that is our only source of revenue for 2015, that gives us a current EPS of about 67. With this in mind, one might argue that we are priced about right for where we are at this stage of the game in this sector. Also, keep in mind that this is based on 2020 projected capacity.

Flame war starting in 5...4...3...2...1...now

PS. I'm long SGLB since this will only be the beginning. The point of this is to set some realistic expectations while additional companies adopt the technology additional parts are manufactured using SGLB technology. We all want this to soar but it could take a while. Be patient while the paint dries.

GLTA longs!