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

To: Larry Brubaker who wrote (5950)	12/14/1998 7:20:00 AM
From: Herb Blair	Read Replies (5) \| Respond to of 27311

biz.yahoo.com Great second stage financing complete <eom>

To: Larry Brubaker who wrote (5950)	12/14/1998 8:51:00 AM
From: FMK	Read Replies (2) \| Respond to of 27311

Larry, You have been misquoting me again. Here is my latest response to Zeev. Zeev, it sounds like you too, are off to a good start! Remember the statement by CEO Lev Dawson that it takes only 1800 batteries per day from line 1 to break the entire company even. At the time, I believe the head count was about 170 employees and less than half were associated with line 1. This means the other half could be supported also with the first 1800 batteries/day. To help estimate cost for 100 additional employees, I would guess about $40k per year each or about $4 mln/yr. At about $33 each profit (maybe $40) per additional laptop battery it would appear to take 121k batt/yr or about 350 additional laptop batteries per day to pay for the 100 added employees. So it looks like it would then take 1800 + 350 or 2150 per shift to breakeven with the increased head count. Since they should be able to make 2500 good batteries per shift, it seems line 1 alone can support over a hundred idle workers with less than 1 shift of laptop production. exchange2000.com You recently stated that successful companies have more then $200,000 per year in sales per employee. And typically, their net margins are 15% to 20% of sales, when very profitable. If we assume the Koreans figured it this way before agreeing to give half their profits to Valence, we could conclude Valence's profit margin should be about twice this, or 30% to 40% of sales, and should therefore be extremely profitable. Regarding your $200k annual sales guideline per employee, lets look at expected revenue from just two of ten production lines. Line 1, 2.7 mln laptop batteries x $75 = $203 mln Line 2, 23 mln cellphone batteries x $10 (ulbi says theirs are worth $40) = $230 mln The total of $433 million divided by 270 employees equals about $1.6 million per employee, neglecting joint venture and royalty income etc. The $1.6 million per employee definitely meets your criteria (by a factor of 8) that "..successful companies have more then $200,000 per year in sales per employee." Regarding allocation of employees, I understand laminate production is somewhat labor intensive and is done in a separate area of the plant. As I understand it, laminate, or a multi-layered sandwich of several different materials, is produced in advance and stored on spools for various destinations including production lines in NI, Hanil/Valence in South Korea, Alliant Technology and GM Delphi automotive. Again, I am pleased that just one shift from line 1 can more than pay for all these employees. When you start counting the additional revenues and associated profits beyond 1 shift per day for line 1, I am sure you will agree that the results become rather impressive!

To: Larry Brubaker who wrote (5950)	12/14/1998 11:34:00 AM
From: mooter775	Read Replies (2) \| Respond to of 27311

Yes, I think 4 million laptops is too high for line 1 and 1.2 million is too low. I'm personally comfortable with an estimate that (1) the company on its line 1 can produce > 2.0 million laptop batteries, and (2) the market will indeed absorb this amount. I am still a comfortable long - very comfortable, given this morning's announcement , of the change in financing terms of the Castle Creek deal. FWIW, and although one can only lose credibility by making a prediction,I think Valence will indeed announce a contract soon and the operating leverage in the business will really surprise investors. I was going to save the following quotation for "'Ol Darkgreen", but what the hell: "No one can walk backward into the future." Hergenheimer