Bylo - There is more to the partnership than just making products for Virtra. From Kelly's letter.
Please note that our relationship with Sanmina-SCI also contemplates bid proposal and marketing support, which should be quite valuable to our company.
This is also an exclusive agreement.
The companies recently executed a memorandum of understanding to form an exclusive business relationship, under which Sanmina-SCI would provide manufacturability analysis, bid proposal and marketing support, and manufacturing services for the production of VirTra Systems' advanced military training simulators.
VirTra Systems Enters Manufacturing Agreement with Leading Electronics Manufacturing Services Provider
August 23, 2005
Friends and shareholders:
Attached please find this morning's press release announcing our new strategic alliance with Sanmina-SCI.
We are extremely pleased to secure this strategic alliance with Sanmina-SCI. Sanmina-SCI is an extremely well-respected, leading contract manufacturer providing world-class electronics manufacturing services (EMS) to original equipment manufacturers primarily in the communications, defense, industrial, medical, computer technology, and multimedia sectors.
Our partnership with Sanmina-SCI enables us to greatly increase production capabilities and empowers our customers with a top-tier, world-wide support infrastructure. VirTra Systems can now offer the power of Sanmina-SCI's manufacturing capabilities, allowing our customers to directly benefit from its superior quality controls, less-expensive manufacturing costs, and well-trained customer support professionals. Aligned with such a highly-respected name in the defense industry, we feel well-positioned to continue to capture more market share, and effectively meet demand, as our 360-degree training simulator products become the standard for military simulation.
Please note that our relationship with Sanmina-SCI also contemplates bid proposal and marketing support, which should be quite valuable to our company.
For many people, Sanmina-SCI is the largest company they have never heard of. However, everyone should immediately recognize its clients, including Hewlett Packard, IBM, Motorola, GE Medical, Lockheed Martin, General Dynamics, Raytheon, Nortel Networks, Cisco Systems, Lucent Technologies, MCI, Nokia, and Qualcomm. Further, Sanmina-SCI has modern facilities in more than 20 countries.
Sanmina-SCI is traded on the Nasdaq National Market exchange under the ticker symbol of "SANM," and you may find more information about Sanmina-SCI on its website located at www.sanmina-sci.com.
As the level of sales of our IVR 4G simulators increases, we will require additional production and support capabilities. This strategic relationships allows us to effectively compete and bid upon large, multi-system orders, and thus this relationship comes at a perfect time. Sanmina-SCI will serve as a very able extension of our production facility in Phoenix. While we have no problem manufacturing multi-system orders, the company's access to such a large manufacturing facility now effectively positions VirTra Systems, through Sanmina-SCI, as a world-class manufacturer.
As you can infer from Sanmina-SCI's prominent list of clients, the outsourcing of manufacturing has been recently experiencing significant growth because it allows for greater savings in the manufacturing process while ensuring standards of quality are maintained or exceeded. Large-scale EMS companies create the perfect environment for these efficiencies from more cost-effective purchasing power via economies-of-scale, the availability of high-tech, modern manufacturing facilities worldwide, and a ready, highly-skilled labor force.
In addition, Sanmina-SCI's facilities are certified to be ISO 9000:2000 compliant; "ISO 9000 standards are primarily concerned with quality management (and) ...ensures that manufacturers successfully fulfill the customer's quality requirements and applicable regulatory requirements, while aiming to enhance customer satisfaction and achieve continual improvement of its performance... (www.iso.org)."
Customers, particularly those within the defense industry, increasingly require ISO 9000:2000 certification. This alliance also ensures that orders requiring this certification may be accepted without issue.
These are simply my personal comments, and should not be relied upon in your investment decisions. I strongly urge you to conduct your own due diligence with regard to any investment in VirTra Systems. I respectfully refer you to VirTra Systems' filings with the United States Securities and Exchange Commission.
--L. Kelly Jones, VirTra Systems CEO