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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: mooter775 who wrote (16251)	11/18/1999 1:09:00 AM
From: Larry Brubaker	Read Replies (4) \| Respond to of 27311

<<I was under the impression that he and others have said that he would have that equipment in place sometime in Q4 2000.>> Wrong. He said they would have the equipment in place to do $80 million run rate in late 2000, and a $250 million run rate "the following year." I assumed they would not only have the equipment in place, but would actually be doing a run rate of $250 million from day 1 of the following year. Hardly a pessimistic assumption, I'd say. <<On another topic, the company on several occasions has estimated a breakeven of approximately $ 40 mm per annum or $ 10 mm/quarter.>> That would be quite a trick. Their loss last quarter was $9.5 million on $350K of revenue. In order to break even on $10 million per quarter, they would have to increase production from $350K to $10 million, while only increasing operating costs by $500K. Does not seem to likely to me. <<If this is correct, then I would guess that the remaining $ 160 mm in a $ 200 mm 2001 would have a gross profit of 65% and a pretax profit of at least 40%.>> Red Chip Review assumed a pre-tax profit of 14.9%. <<which should leave a 30% after tax margin on the incremental $ 160 mm>> Wow, mooter, that's something! Do you realize that Intel only earns a 25% net profit in an industry they dominate? That Cisco Systems earns a 17% profit in an industry they lead? I guess you must be assuming that VLNC will dominate the battery market to a greater extent than Intel dominates the semiconductor market.