Further notes/interpretations from the conference call:
(1) LD stated that the NI plant "has made our first film successfully, which is the key to the process". Other machines have all been run successfuly by themselves and the company is ready to start production (from line 1 - the laptop line) either later this week or early next week.
(2) Company expects to produce "a superthin laptop battery that will run 10-12-14 hours" and be lighter than existing laptops with 2 hour battery capacity.
(3) Henderson continues to produce samples which > 14 OEMs are evaluating. Some OEMs will likely wait for actual market introduction of the batteries, some will be more aggressive than others and begin their layout and design-in process soon after batteries are shipped from NI. Company is expecting the responses from some OEMs within the next several weeks. (My inference is that they are actively negotiating with some of these OEMs now.)
(4)LD thought it was an appropriate time to encourage analyst visits and hoped to have some (at least arranged, I presume) within 3-4 weeks.
(5) The small cell line, ie the second assembly line, is scheduled for startup at the end of September, the third assembly line (I think a laptop line in the 8"x10" format with some flexibility in production sizes) is scheduled for delivery 9/21, the fourth line to Korea in October, and the fifth line to NI in November.
(6)Current startup capacity for the initial line is about 5 laptop batteries/minute, which would more than allow breakeven operations.
(My assumption here is 300/hr, 2 8-hour shifts/day or 4,800/day, 60% >
breakeven opeating levels.) LD did say that the initial line could, at its expected startup rate, make the company profitable on an operating basis.
(7) Company expected to "obsolete its own batteries" with substantially better performing batteries in 1999, using several different types of materials now in the research/early development stage.
In sum, if one chooses to believe Lev Dawson, the company is progressing on schedule (slightly ahead according to Lev)and has (in my opinion) taken a substantial majority of the risk out of the production process. I still expect a contract within the next few weeks, but, more importantly, can see the beginning of real business momentum in Q4. Don't expect sizable institutional interest until either NI plant visits or announcement of orders, but am quite confident the company will have them soon. |
