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

To: MGV who wrote (4146)	9/10/1998 3:03:00 AM
From: kolo55	Read Replies (1) \| Respond to of 27311

I gave all the assumptions in my posts tonight. Revenues for the first case are based on the battery run rates given by Lev in the conference call which works out to 1M laptop batteries per year and a price of $75 per battery, which I have discussed time and time again. Gross margin is assumed at 50%, which is typical for new product manufacturers. It really should be higher than 50%. The R&D and SG&A were based on the latest Q report, but I revised R&D down, and SG&A up a lot. For the second case, the higher production case, I just increased CGS and SG&A. Remember this case may be achievable by running multiple shifts on the first line. In fact, the income statement may be understating the income for this case because its unlikely the labor component of the CGS will double from the first case. The additional labor required to double production on the line shouldn't double. Maintenance and reserve manpower will probably remain the same. The Interest Expense is based on $30M of debt at 10%. I don't know how the company will show the 8% annual increase in convertible debt under the recent financing arrangement, so I simply used a conservative debt amount (for this case) and a conservative interest rate. Paul