SINTX TECHNOLOGIES ENTERS INTO A SECOND LONG TERM SUPPLY AGREEMENT FOR THE AEROSPACE MARKET
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Insights
The Long-Term Agreement (LTA) between SINTX Technologies and a leading aerospace components manufacturer presents a strategic pivot for the company, indicating a diversification of its customer base. This move could potentially stabilize revenue streams and reduce the dependency on the biomedical sector. Given that the aerospace and defense sector is known for its long product cycles and high barriers to entry, securing such a contract is indicative of SINTX's competitive edge in ceramic technologies.
For investors, this LTA, valued at up to $8 million, may not represent a significant percentage of the company's market cap, but it does imply a steady income source over a decade. The option for a renewal adds the potential for extended stability. The commitment to cost reduction and efficiency improvements within the LTA could also enhance margins over time, which is a critical factor for profitability in the manufacturing sector.
From a financial perspective, the LTA's potential value of $8 million over ten years provides a forecastable cash flow, which is beneficial for financial planning and could lead to an improved valuation of SINTX. It's important to note that the aerospace industry often demands significant upfront investment in R&D and compliance with stringent quality standards, such as AS9100D and ISO 13485:2016, which SINTX already meets. The upfront costs associated with these investments have likely been incurred by SINTX, suggesting that the incremental costs associated with fulfilling this contract may be lower, improving the overall financial impact.
Additionally, the expansion into aerospace and defense, as well as energy sectors, may appeal to investors looking for companies with diversified risk profiles. The announcement could potentially attract new investors and positively influence the stock price, assuming that the market perceives this agreement as a sign of growth and stability.
Entering the aerospace sector involves intricate supply chain dynamics due to the need for precise manufacturing capabilities and adherence to strict regulatory standards. SINTX's ability to qualify for such a demanding role suggests a robust supply chain and quality management system. The LTA may require SINTX to further optimize its supply chain for efficiency and cost-effectiveness, which can have ripple effects on its operations, potentially leading to improvements in other product lines, including their biomedical offerings.
The focus on implementing productivity programs as part of the LTA could also serve as a catalyst for operational excellence within SINTX. This can lead to better inventory management, reduced lead times and overall improved customer satisfaction, which are critical components for success in both the aerospace and biomedical markets.
SALT LAKE CITY, Feb. 21, 2024 (GLOBE NEWSWIRE) -- SINTX Technologies, Inc. (www.sintx.com) (NASDAQ: SINT; “SINTX” or the “Company”), a manufacturer and developer of advanced ceramic materials and related technologies, announced today that it has entered into a 10-year, Long-Term Agreement (LTA) with a leading manufacturer of aerospace components and systems. Under the LTA, SINTX will manufacture and supply key ceramic aircraft engine components which have been qualified through a rigorous evaluation process.
“We are excited to serve our customer who is a world leader in aerospace systems,” said Dave O’Brien, Executive Vice President and Chief Operating Officer for SINTX. “SINTX’s quality systems, operational capabilities, and expertise in ceramic technologies have positioned the Company well to serve customers who require the most stringent quality standards, such as those found in the aerospace and biomedical markets. The Quality Management System for our Salt Lake City facility is certified as compliant with both the AS9100D and ISO 13485:2016 standards - for the aerospace and biomedical sectors respectively.”
“This agreement is another step forward for SINTX, as the Company continues its strategic shift to expand its customer base beyond the biomedical sector. Aerospace & Defense and Energy sectors now represent significant growth opportunities for us across our product portfolio. We also anticipate continued growth in our biomedical business, supported by new specialty opportunities and the recent introduction of a new silicon nitride spinal implant by our partner, CTL Amedica,” added Mr. O’Brien.
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About SINTX Technologies, Inc.
SINTX Technologies is an advanced ceramics company that develops and commercializes materials, components, and technologies for medical and technical applications. SINTX is a global leader in the research, development, and manufacturing of silicon nitride, and its products have been implanted in humans since 2008. Over the past several years, SINTX has utilized strategic acquisitions and alliances to enter into new markets. The Company has manufacturing facilities in Utah and Maryland.
For more information on SINTX Technologies or its materials platform, visit www.sintx.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA), including, but not limited to, statements regarding SINTX’s ability to effectively manufacture ceramic products, the market for and benefits of SINTX’s ceramic products, SINTX’s ability to effectively compete in the ceramic industry, and other statements that are not based on historical fact. Such forward-looking statements are subject to a number of risks and uncertainties that may cause actual results to differ from current expectations. Risks and uncertainties that may cause such differences include, among other things: there is no firm commitment for the manufacturer of aerospace components and systems to purchase products from SINTX; SINTX’s products may not prove to be as effective as other products currently being commercialized or to be commercialized in the future by competitors; risks inherent in manufacturing and scaling up to commercial quantities while maintaining quality controls; volatility in the price of SINTX’s common stock; the uncertainties inherent in new product development, including the cost and time required to commercialize such product(s); market acceptance of our products once commercialized; SINTX’s ability to raise funding and other competitive developments. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management’s current estimates, projections, expectations and beliefs. There can be no assurance that any of the anticipated results will occur on a timely basis or at all due to certain risks and uncertainties, a discussion of which can be found in SINTX’s Risk Factors disclosure in its Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC) on March 29, 2023, and in SINTX’s other filings with the SEC. SINTX disclaims any obligation to update any forward-looking statements. SINTX undertakes no obligation to publicly revise or update the forward-looking statements to reflect events or circumstances that arise after the date of this report.
Business and Media Inquiries for SINTX:
SINTX Technologies
801.839.3502
IR@sintx.com
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