VirTra Inc (VTSI)

[gemmerling]

VirTra Systems (OTC BB: VTSI); In Partnership With Sanmina (NASDAQ: SANM)

Just prior to the start of today's trading, VirTra Systems was finally able to let the cat out of the bag on their manufacturing partnership. As it turns out, $12.2 billion Sanmina (NASDAQ: SANM) will handle large volume manufacturing for the IVR Simulator series you see depicted here.



This new alliance addresses several key issues for the company. First and foremost, it eliminates any doubt in the minds of potential clients with regard to the company's ability to both deliver and continue to service large orders for the long term. Sanmina is a massive world wide electronics manufacturer with numerous defense related contracts. Their reputation in this arena is stellar.

In addition, this new alliance bolsters the company's position against misleading suggestions from a key competitor. As Chairman Kelly Jones has stated on previous conference calls, VTSI's key competitor has made a habit of maligning the company to potential new customers, suggesting that VTSI wasn't capable of manufacturing, delivering, and servicing their product. The Sanmina relationship eradicates that argument.

On a further positive note, this alliance suggests the company is prepared to receive and deliver the huge pending orders that have long been alluded to. As previously disclosed, a branch of the US Military has verbally committed to make the IVR series a core part of their training regimen. The magnitude of the orders, if delivered, would completely transform the company into a powerhouse of high volume sales and profits.

I like the stock at these levels. It's August, it's quiet, and no one wants it right now. Despite an optimistic outlook on the order flow, the branch of the US Military has not signed any purchases orders as of today.

Despite being at War, the entire defense sector is slow. Suppliers of the day to day armaments used in the War in Iraq are busy, but the next generation technologies to be used for the future of the war on terrorism are being delayed as the DOD is stretched in war effort.

This climate has to change soon. Good old Yankee ingenuity keeps us in place as the most powerful country in the world. Manufacturing may go abroad to cheap labor pools, but innovation stays stateside.

This tradition of technological advancement has been slightly derailed in the DOD, but will get back on track. VTSI was promised order flow from the supplemental budget, and it hasn't materialized. The fiscal '06 defense budget becomes available October 1, and orders could flow.

In the interim, the company continues to land one and two unit sales which keep the doors open and allow VTSI to keep positioning for the major breakthrough.

It's August, it's cheap, and no one is paying attention. Sanmina has agreed to manufacture their large orders. Why bother if there isn't a high level of confidence the orders are coming?

The company will be around for a long time. The stock is likely to be much higher by year's end. If the military delivers orders as promised the stock will be worth $1 in my view. Accumulate.

http://www.otcjournal.com/archive/listserv/20050823-1.html