Jay/Kris - I spoke to Mr Mansfield a day or so ago and picked up the
following -
The new appointments were replacement staff. However, the head of Sales
and Marketing was a position that had been open for around a year, and
Vitronics were being very choosey about the person they brought in. One
of the other position was a replacement for a previous holder who had
been "underperforming". The feeling overall was that the new appointments
had definately strengthened the Sales and Marketing side of things and
that this was all positive.
I didn't hear anything about the product glitch which had delayed the
SelectSeries roll-out. However, it does sound as if the line is only
now transitioning to Full Production status - i.e. is only now completing
its Pilot Production stage. In case this means nothing to some of the
readers of this note, this is the early stage in production output where
the production process is still receiving fine-tuning and is generally
covers the first few (2-3) months of product revenue shipments.
This effectively means that material costs and labour rates are higher,
thereby temporarily increasing expenditure.
However, it sounds as if there are several SelectSeries now deployed at
key customer sites, and the reaction so far is positive. The possibility
of repeat orders from these sites is therefore good and must also bode
well for other new orders. Approximately 50% of production output is
now SelectSeries.
It seems as if the Conceptronics patent issue will also come to a head
within the next 6 months or so. (And I guess there is always the possibility
of an out of court settlement in favour of Vitronics now that the
previous judgement has been overturned).
We also talked about the general industry slow-down and expectations for
a recovery.
So what does this all mean ? Well, reading between the lines I would expect
things probably to disappoint this quarter, strengthen slightly next
quarter and then improve with general market conditions thereafter.
If there is a general easing of Dow levels over the next few months, then
the opportunity could arise to buy at <$1 before things strengthen again.
However, Vitronics have been trying to drum up market interest, and given
the very small equity base it is entirely possible for things to move up
by several 10s of % without any obvious cause. In spite of this, I
would be very suprised if we see >$2 again before H2 '97.
The bottom line is that this business does NOT sound as if it's in trouble ! |
