Larry, You have been misquoting me again. Here is my latest response to Zeev.
Zeev, it sounds like you too, are off to a good start!
Remember the statement by CEO Lev Dawson that it takes only 1800 batteries per day from line 1 to break the entire company even. At the time, I believe the head count was about 170 employees and less than half were associated with line 1. This means the other half could be supported also with the first 1800 batteries/day. To help estimate cost for 100 additional employees, I would guess about $40k per year each or about $4 mln/yr.
At about $33 each profit (maybe $40) per additional laptop battery it would appear to take 121k batt/yr or about 350 additional laptop batteries per day to pay for the 100 added employees. So it looks like it would then take 1800 + 350 or 2150 per shift to breakeven with the increased head count. Since they should be able to make 2500 good batteries per shift, it seems line 1 alone can support over a hundred idle workers with less than 1 shift of laptop production.
exchange2000.com
You recently stated that successful companies have more then $200,000 per year in sales per employee. And typically, their net margins are 15% to 20% of sales, when very profitable.
If we assume the Koreans figured it this way before agreeing to give half their profits to Valence, we could conclude Valence's profit margin should be about twice this, or 30% to 40% of sales, and should therefore be extremely profitable.
Regarding your $200k annual sales guideline per employee, lets look at expected revenue from just two of ten production lines.
Line 1, 2.7 mln laptop batteries x $75 = $203 mln
Line 2, 23 mln cellphone batteries x $10 (ulbi says theirs are worth $40) = $230 mln
The total of $433 million divided by 270 employees equals about $1.6 million per employee, neglecting joint venture and royalty income etc. The $1.6 million per employee definitely meets your criteria (by a factor of 8) that "..successful companies have more then $200,000 per year in sales per employee."
Regarding allocation of employees, I understand laminate production is somewhat labor intensive and is done in a separate area of the plant. As I understand it, laminate, or a multi-layered sandwich of several different materials, is produced in advance and stored on spools for various destinations including production lines in NI, Hanil/Valence in South Korea, Alliant Technology and GM Delphi automotive.
Again, I am pleased that just one shift from line 1 can more than pay for all these employees. When you start counting the additional revenues and associated profits beyond 1 shift per day for line 1, I am sure you will agree that the results become rather impressive! |
