I too listened to the conference call and my net reaction is that there was no particular reason to rusn out and buy the stock until more confirmation of sucessful product production is available - and this seems to be late September at the earliest.
(I say this as one who is long VLNC, and have been since 10/95.)
I would add the following comments (and inferences) to notes from the conference call:
(1) According to CR, line 1 has as yet never produced working prototypes of sufficient quality to send to potential OEM customers - no prototypes have been sent from Ireland, all apparently from Nevada.
(2) While management expects line 1's problems, including the lamination problem, to be eventually solved, there is no evidence as yet that they have solved the problem. We'll presumably know in several weeks.
(There was much discussion on this thread of the possibility of an announcement of a potential OEM contract, and even mention, I believe, of test equipment being ordered by a potential OEM. The failure of line 1 to produce satisfactory prototypes for inventory, even though these were produced as early as mid-June, would seem to set back the testing and potential OEM contract date by 60 days at least, to late September/early October at the very earliest.)
(3) The apparent failure to date of line 1 puts even more pressure on line 2 to succeed, about which management is optimistic.
(4) The difficulties in line 1 may in the longer term result in a competitive advantage for VLNC, which can, if need be, even scrap line 1 as lines 2-5 are installed. Ultralife Battery, on the other hand, has ordered (but not installed) only equipment from the same Florida manufacturer which supplies VLNC's line 1. I sure wouldn't want to place any serious bets on their being able to produce quality batteries if VLNC has been unable to do so with what is probably pretty similar equipment. |
