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

To: DKR who wrote (3662)	8/12/1998 12:33:00 PM
From: kolo55	Read Replies (1) \| Respond to of 27311

Notes on conference call- Customers, technology, breakeven. Disclaimer: These are my notes and interpretations the best I could do; they move pretty fast in these calls. Any errors are my fault and may not reflect the company's official position. Lev mentioned that they have sent samples to 14 OEMs at this time. they have limited this to the larger potential customers. These customers are not interested in the small volumes currently produced in Henderson, and want batteries from NI and confirmation that NI will be able to produce the volumes they need. In response to a question about "negotiating with 14 customers": They aren't negotiating with 14 potential customers; they have had technical discussions, and in some cases, talked about pricing, volumes, and delivery schedules, but not really in the negotiation stage yet. The potential customers need to see batteries from NI. Cellphone makers are more willing to take a risk, since they can design with existing Li-ion cylindrical batteries as a back-up. But portable computer makers need to design their product for the Valence Li-polymer battery specifically, and so they want good confirmation of delivery volumes and schedule. They have some customers that are sitting down and laying out new products; not designing yet, but defining the impact of the Valence battery on their products. Valence is not pushing the customers to make decisions until they have the NI batteries in hand. Lev expects that they should be able to make a decision within several weeks of getting the batteries, and NI achieving volume production levels, because of the amount of testing they have done with batteries from Henderson. In response to question about threat of new battery technologies: He doesn't see any new threatening technology yet. Lev pointed out that Valence has spent over $100M and a number of years developing this technology, and has over 100 patents with more coming. Lev said "I personally don't know how someone could produce a Li-polymer battery without stepping on one of our patents." He also said that they are constantly improving the battery, and expects the batteries they make a year from now will be much improved over the current version. In a question about Production levels in NI: The large battery line can produce 5 batteries (cells?) per minute. The smaller battery lines can produce 5 batteries per minute, and there are two machines. Breakeven point for the company is about 3000 batteries per day. Valence should be profitable with only one line running. If I heard correctly, there is another line scheduled to be delivered to NI in October, another in November, and one line to Korea in November. Paul