CONFERENCE CALL NOTES:
First, please forgive the typo's, etc. but I wanted to get this out.
The call started with Cathy Roberts announcing this purpose of this call was to discuss quarterly results. She stated that Cal Reed(CR) and Dave Archibald(DA) would be the speakers. She then turned the call over to CR.
CR started off with the standard "forward looking" commentary and then turned the discussion of quarterly results over to DA. DA basically regurgitated the press release that a prior poster has already submitted here. DA did state that the marketing expenses involved head count hiring and increased travel expenses. Cash burn rate over the last 3 qtrs was 9.5 Million. He then turned the call back over to CR.
CR preceded to talk about the Northern Ireland(NI) plant. He stated that Line 2, delivered from Italy on 7/14, is now in final stages of prove-in. They have enountered some problems which require redesigning of some line parts, but the problems are not major and are surmountable. He then opened the floor to questions:
Questions came from: Covington Associates, Clarion Capital, Montgomery Securities, Advantage Capital, Paine Webber and a private investor. They were:
1. How was their sales effort going? CR: VLNC is continuing to contact customers. VLNC has identified potential customers for future delivery of testable products, but so far no agreements have been signed.
2. What about the shareholder litigation? CR: VLNC petitioned the court for a summary judgement. The Court sent the request to a "special master," who has ruled the suit is without merit due to the statue of limitations. This has been returned to the Court for consideration.
3. How do the initial units off Line 1 look? CR: Line 1 was initially tooled for cellphones and is now being converted to the larger format for laptops and that conversion is still underway.
4. What of the lines beyond 1 and 2? CR: There are 4 lines ordered from the Italian firm. The cell size to be manufactured by these lines has not yet been decided because they are under negotiations with potential customers for the need cell sizes they require. (my comments--they will tool the line according to the customers needs?) CR spoke about the Korean plant briefly, he said it will be delivering test cells to the government within the next month. Their underwater cells are currently under development and VLNC is pleased with the current development state.
5. What is the perfomance/cost comparison between their Lithium Polymer product and their nearest competitor? CR: Lithium Ion is their nearest competitor and he feels there are several advantages to Lithium Polymer over Lithium Ion. He went on to mention 2:
1) the format of the battery(shape) is more advantageous with L.P.
2) L.P. weighs upwards of 20% less than L.I.
He did state that the cycle life between the 2 competing tecnologies are similar, "They didn't see any difference between the two.!
6. How is the prototype testing going? CR: There has been a misconception out there regarding the Northern Ireland plant. No batteries are being extensively tested off of the N.I plant line(s).
7. Whats the prospect of additional equity financing being needed?
CR: They believe an additional round of financing will be required by end of year, what with their current burn rate. However, recently one of their major stockholders has exercised their warrants thus providing some additional cash. How much he didn't say.
8. A question about the production timing of Line 2? CR: He said that they anticipate having cells out by late summer and commercial production is still on target for 1st qtr of '98. He did state that August is slower what with Europe(Italy) doing their vacations during August.
9. Hows the timing of Line 1 being converted to laptop cells?
CR: The next couple of weeks VLNC will start making laptop cells, once they have the dies out of Florida. He also mentioned the August vacation routine of Europe as a reason. Once those batterys are produced, to test them will take 90 to 120 days in order to test to upwards of 300 cycles, although by the halfway point they'll have a good feel for the products potential.
10. Lamination problems on Line 1? CR: Line 1 has been troublesome because it uses new technology(large format). They've identified the problems and they view them as being surmountable,
"I believe we have our arms around the problems." The Italian equipment is far less troublesome because they've already put it together and tested it in Italy.
-----
Whewww!! That's about it, sorry for any typo's etc. At this time it appears this call didn't cause anyone to become upset(nor should it have, IMO), current bid/ask is $8.5 by $8.6875.
Regards!
John~ |
