Friday, October 17, 2014 4:24:08 PM
Consider the effect of the C-250 ...
I've not put numbers to it yet, but maybe someone else has the time.
Consider that I believe it will get first in the field late calendar Q4 or '15 Q1. It will take some time to start to penetrate market and build volume. But when it does:
1. Austenitec recuperator is less expensive than current stainless. Could we lower DMC by a couple percentage points with that change? That increases margin.
2. If someone orders a C-1000, we only put four units in a cabinet instead of five. Allowing for reduced labor, maybe some minor reduced material usage, ... that implies appx. 20% less DMC per C-1000.
3. Retail pricing should hold steady or even increase due to ASP sell price increase and the fact that lab runs have shown actual output to be 270Kw, leaving 20Kw for "safety margin" to cover manufacturing tolerance variations and still meet 250Kw spec'd output.
4. Customer can then order a C-1250, no? That means same labor & misc materials as current C-1000, i.e. almost the same cost, and selling price about 25% greater than current C-1000, assuming no discounts.
5. IIRC, ~$1MM for a C-1000? So, ~$1.25MM for a "typical" C-1250? With lower or the same unit cost?
If the economy in the rest of the world starts to recover so we can start to ramp volumes in a year or so after that, we should have an undeniable path to profitability if management continues to control costs and don't give themselves big raises and bonuses.
If they avoid any more capital raises, we should profit handsomely.
The only downside is if I'm correct we don't start to see these effects for another year or so.
Alright - bring on the brickbats and and remind what I've overlooked!
Bill
I've not put numbers to it yet, but maybe someone else has the time.
Consider that I believe it will get first in the field late calendar Q4 or '15 Q1. It will take some time to start to penetrate market and build volume. But when it does:
1. Austenitec recuperator is less expensive than current stainless. Could we lower DMC by a couple percentage points with that change? That increases margin.
2. If someone orders a C-1000, we only put four units in a cabinet instead of five. Allowing for reduced labor, maybe some minor reduced material usage, ... that implies appx. 20% less DMC per C-1000.
3. Retail pricing should hold steady or even increase due to ASP sell price increase and the fact that lab runs have shown actual output to be 270Kw, leaving 20Kw for "safety margin" to cover manufacturing tolerance variations and still meet 250Kw spec'd output.
4. Customer can then order a C-1250, no? That means same labor & misc materials as current C-1000, i.e. almost the same cost, and selling price about 25% greater than current C-1000, assuming no discounts.
5. IIRC, ~$1MM for a C-1000? So, ~$1.25MM for a "typical" C-1250? With lower or the same unit cost?
If the economy in the rest of the world starts to recover so we can start to ramp volumes in a year or so after that, we should have an undeniable path to profitability if management continues to control costs and don't give themselves big raises and bonuses.
If they avoid any more capital raises, we should profit handsomely.
The only downside is if I'm correct we don't start to see these effects for another year or so.
Alright - bring on the brickbats and and remind what I've overlooked!
Bill
Join the InvestorsHub Community
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
