Stuart's interview yesterday was very good. It made very clear to shareholders how he can be very, very profitable and how the business plan works. He starts with a world class product. Hires the best talent to sell it. Then he and the team take orders (can be on-site) and then contracts with a toll manufacturer, who has excess capacity (very common world-wide). The toll manufacturer is then required to sign an NDA Then the toll manufacturer will be supplied the raw materials by INTK and then combines them with exact measurements and then can ship product to end users. Because INTK is dealing with the largest companies in the world and not Mom & Pop customers, the manufacturer will then extend credit to INTK and this allows INTK to extend terms to their customers (net 30, 60, etc). In the past, INTK had to ask their customers to wire in funds so that INTK could pay in advance for the production. That is no longer the case which is allowing for the hypergrowth that INTK is experiencing. INTK does not have the need to build and maintain expensive manufacturing facilities, hire production workers, etc. (with the exception of Anaconda Insulation, when they start production). They only need high quality sales people/management who can work remote and conduct plant visits as needed. This allows for an unusually high margin for INTK, which will allow them to expand quicker, buy back more stock, etc.
traderking60 05/20/22 7:19 AM
Bearish
