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

To: Robert Cohen who wrote (21641)	9/27/2000 5:58:47 PM
From: Rich Wolf	Respond to of 27311

*Re: your query concerning revenue from G cells** This makes no sense, Robert, unless QCOM has a lot more in the pipeline that weren't reported as 'shipped' as of 9/16... (or was that shipped as of end of August, and reported on 9/16?) If QCOM order paid $15/pair of cells, then Valence got paid only $600k for all cells in the 40,000 handsets shipped by QCOM as of 9/16. Valence reported $2M of rev through end of June (a full two months before the end of August), it's doubtful that Alliant or Hanil made up more than half of it. And on the last CC, Lev stated production rates (though didn't say how many shifts per day, or if every day, but this was implied) that would lead to the original numbers I posted. So, we have a discrepancy. There's missing information here, either cells not made or cells in transit that were not accounted for by the G* numbers. I'm inclined to think the latter is the case, as the bulk of Valence revenue reportedly came from the G* order, right? That would imply $1M rev from the G* order through the end of June, and if the cells were $20/pair instead of just $15, then maybe you'd have 50,000 pairs by the end of June. OTOH, remember that many customers would order at least one spare battery, for this application (I would), so maybe the G* numbers should really be inferred as '40k handsets and spares' which would mean 80k pairs of cells, not just 40k. And if these were sold to customers by the end of August, then Valence would have had to ship prior to that... if the pipeline is now one month ahead, then there's only one month of production in between. Another issue, was that total handsets shipped? This would imply fewer than 40k were using Valence cells. OTOH, the initial handsets had cells made by TDI/HET, many of which were returned for replacement with Valence cells (acc to Valence), so this raises the number back up again. Summary: there must be more in the pipeline, unsold by QCOM yet. On another but related topic: A heads-up: without additional shipping to Alcatel yet, even steady production to the G* order at the rate I quoted previously (based on Lev's comments re: production rates) wouldn't get Valence to the CIBC est'd revenue numbers for the Sept Q (about $4.5M, if I remember right), much less the Dec Q (over $7M, again from memory), since the ramp-up can take some time (as we've seen). Rather, maybe $2.5M this Q, give or take, depending upon the size of the Alliant order Lev mentioned during the last CC, and assuming G* production was consistent ... then $2.5-4M for Dec Q (assuming no Alliant order, though this could be made up in part by laminate sales to Hanil IF they start up this quarter), IF Alcatel production can come online halfway through the quarter (before Thanksgiving), to add in another mil or so. The pricing is an unknown variable, as are the actual production rates and startup time for Alcatel, so all we can do is extrapolate the company's numbers from the last quarter that we think came from G*, and add in some amount for Alcatel. Regards, Rich