Is there Hope? A Yahoo poster has become impatient and is considering pulling out. Here are some relevant thoughts before I am away for a few days.
Why I have loaded my boat.
Let's look again at the earning power of installed and recently-purchased equipment. It will require some assumptions, but IMO, should be time well spent. These are maximum capacities (3 shifts/day) and the product mix is assumed. You should scale them down accordingly for one or two shifts/day if you prefer and make your own assumptions on likely product mix and what Valence's customers should pay per watt-hour of storage capacity and percent profit margin to expect.
1-Assembly line 1, four million 4x5 inch x 6mm cells for about 950,000 8x10 inch laptop batteries per year at about $150 each..https://www.siliconinvestor.com/readmsg.aspx?msgid=5243575
2-Assembly line 2, 240 bi-cells per minute (from Cal Reed during conf call) believed equivalent to 60 4x4inch x 4 mm(thinnest of 3 thicknesses) laptop cells per minute(Cal said each cell takes 4-6 or 4-8 bi/cells). 22 hrs per day x 350 days works out to 27.7 mln laptop cells per year that should store about 15 watt-hr each. Each laptop battery is expected to take 3 or 4 cells each, depending on voltage required.
3-Assembly line 3, 240 bi-cells/min equivalent to 24 (1.4 x 2.56 inches). Thickness 9mm (.354 inches). This works out to 11 million cellphone cells per year that should store about 5.25 watt hours each. Cellphone batteries should require 2 cells each.
4-Assembly line 4, On order for October delivery as stated in the last conf. call.
5-Assembly line 5, Also on order for October delivery as stated in the last conf. call.
6-Assembly line 6, Also on order for October delivery as stated in the last conf. call.
Lines 1-3 appear capable of making 4 + 27.7 + 11 or about 43 million cells per year(maximum capacity) with a mixture of cellphone and laptop cells. We could project the same average for lines 3-6 for an additional 43 million cells per year or a total of 86 million cells per year for lines 1-6. It is very likely that lines 4-6 may be designated for different products or sizes.
How much laminate will they require?
7-Coater/Laminator's (total of 4, 1 of them in Henderson). Last summer Cal Reed stated during a conference call that three coater laminators in NI have the combined capacity for 60 million cells per year. If you add the one in Henderson, it would total 80 million cells per year. Laptop batteries require 3 or 4 cells and cellphones likely 2 cells. Valence will also supply laminate to the joint venture partners.
Is it a coincidence that the combined maximum capacity estimated above for lines 1-6 is in the same ballpark as Cal Reed's stated capacity of the four coater/laminator machines?
After adding up the capabilities of the Northern Ireland plant, consider also
8-50% of profits from the Hanil telecom joint venture.
9-50% of the profits from the Alliant Tech joint venture.
10-Up to about $30 million royalties possible from General Motors under a licensing agreement.
11-Possible laminate sales for vehicle batteries.
12-More joint ventures.
13-The over $30 million rebate that should begin on a pro-rated basis from the Irish Government as product is shipped from the NI plant.
There are presently about 24 million outstanding shares. Financing expected shortly may dilute this perhaps by 2-4 million shares for a new total of 26 or 28 million shares-as Don Wolanchuck said "big deal".
The present burn rate is between $4 and $5 million per quarter so it would take somewhere around $16 to $20 million per year in profit to break even. Compare this with items 1-13 above and draw your own conclusions.
If this same info is presented to a financial institution, do you think there would be a problem borrowing money? The company has repeatedly said they were not worried about it and I have repeatedly found reason to agree with them.
Have a good weekend! |
