Several additional comments regarding the conference call:
(1) I, too, sensed a more relaxed and confident Cal Reed than prior calls regarding production schedules, ultimate success, etc.
(2) If you run the line capacity data in the conference call and restated by Wm Sharp, 24 cellphone batteries per minute equates to roughly $ 60-$70 mm revenues/line/year, assuming roughly 2 1/2 shifts per day for 6 days/week. Also 6 laptop batteries/min equates to an equal amount assuming a $ 32/laptop price (and $ 8/cellphone price) for the same line utilization. Cal seemed reasonably confident that the company could achieve these run rates by mid-1998 - at least that was the target.
(3) My undertstanding of the lamination and coating equipment is that this $ 12 mm investment - in order to control completely in house the product quality - is targeted for mid-December installation.
More importantly, I have been told by management that the coating and lamination for the initial 2 lines could in fact be supplied from the smaller coating and lamination line in Henderson, NV. This indicates two things: (a) confidence on management's part that the process is substantially under control and will in fact be able to begin production in Q1 calendar 1998, and (b) the ultimate factory requirements for battery production - and hence coating and laiminating equipment - should substantially exceed those able to be supplied by Henderson.
(4) Earlier lamination and recharge problems of the batteries have in management's opinon been solved. The principal current task is to increase the effective production yield of good cells - perhaps by chemical improvement (which led to the increase in #s of recharges to exceed the 300 level), and perhaps by mechanical tinkering (I hope not, since this seems to take much more time.)
(5) Company is actively discussing joint venture relationships (rather than licensing, in which they would be required to transfer more of their proprietary technology). I have only a guess at this, but I would not be surprised to see a new jv announced by year end - but this is only speculation. |
