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Technology Stocks : VALENCE TECHNOLOGY (VLNC)

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To: FMK who wrote (6331)12/27/1998 8:38:00 PM
From: Zeev Hed  Read Replies (2) of 27311
 
FMK, they have $34 MM in depreciable assets, some of it will have a life of 3 years some 10 and buildings (without RE) probably 30 years (some buildings only 30 years). For a first cut, I would take about $4 MM annually in depreciation, until we see actual depreciation charges. If you assume margin contributions of $25 per battery (33%), that is about 160,000 batteries per year. If you assume 250 working days per year, you get the break even at 2240 batteries per day (using your 1600 batteries per day as a cash basis break even). These are of course just back of the envelope calculations and they are still increasing their depreciable assets (I believe by $3 MM in the last quarter).

Zeev
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