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Technology Stocks : VALENCE TECHNOLOGY (VLNC)
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To: geep who wrote (4130)9/9/1998 3:30:00 PM
From: FMK  Read Replies (1) of 27311
 
geep- For the conservative numbers I just used Lev's 3000 per day for line 1 to break the company even. Anything greater would therefore make the company profitable. The burn rate is about $20 million per year, perhaps less since some major equipment has been paid for. 2 shifts x 2400 = 4800 or 1800 more than required to be profitable.

The assumption is that each additional 3000 batteries per day results in $20 million profit. 1800/3000 x $20 million equals $12 million or about $0.44 per share. For 3 shifts it works out to 4200/3000 x $20 million equals $28 million profit/27 million shares or about $1 per share. I admit its rough, but its an engineer's way of crunching numbers.

We haven't seen many accounting types post their computations here, although I have invited others to post their earnings projections based on machine capacities. You may remember that Mooter has posted his conservative estimate of $1 per share earnings per production line.

As you may recall, his numbers and mine are based on dozens of conversations with the company and information gathered over a very long period of time. Some of my calculations resulted in higher earnings than Mooter's, but I am comfortable with his $1 per assembly line, neglecting joint ventures and other revenue sources.

Regards, FMK
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