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Commercial finished goods:
RR: Focus on ramping Flic and Nomad. First phase in both cases is behind us.
Value and demand of products is no longer in question. In last 4 weeks of quarter overcame production difficulties and now have sustainable production.
Focus on blocking and tackling coming to market.
Flic below expectations due to delay of large order from Shell Canada. Rollout from Utilitran delayed somewhat. Past 3 quarters have seen sales comprised of a few large orders.
Flic had strong October, 1500 units. Sales funnel looks very different – larger number of customers. Look for growth and smoothing of Flic revenue. Relationship with Smead is key – well known office products company. Flic well suited to retail channel – Staples, Office Max – shrinkwrapped file management applications. App software provider model of software delivery important to uptake of Flic. Smead launch to reduce price of SmeadLink product. Next front is to perform catalog ordering. JumpTech doing that today, 2005 significant catalog ordering potential.
Make bar code scanning broadly available. Growth in Q4 for Flic. Multiple dist channels starting to take hold. Repeat orders.
Nomad q3 constrained by production problems
only last three weeks of quarter shipping units to customers
quality is good, fixed costs should decline
began rollout in late september
immediate upturn in activity as result of availability of units
reference accounts, media awareness, targeted telemarketing
set targets for lead generation qualified requests
increase in sales activity across the board in October
400 dealers requested demos, across all major brands of vehicles.
reference account program helps brand awareness, prospects, feed sales channel with targeted leads effectively. Top 20 Tool award helping awareness.
132 units sold to date.
october best revenue month with Nomad
soliciation for purchase of 37 Nomads + accessories for Army Reserve vehicle maintenance depots
significant new market opening up
miltary sales to come in larger unit chunks; a lot of opportunities for Natl Guard and other branches of military
completed highly successful test for Air Force maintenance crews
recently seen very strong and growing interest in military maintenance
lots of money available for purchase of e-tools
broad categories of budget available to support purchase of tools like Nomad
targeting more activity from independent reps
growing footprint by adding more reps
adp + reynolds & reynolds will distribute Nomad in Canada & US later in this quarter
large leads coming from independent reps
add software + solution providers as part of disty channel
growth from repeat orders as well
Andrew:
power user groups of Nomad are developing
positive feedback affirming use of Nomad
users don’t take it off their heads
tool is boosting productivity, grass roots success and acceptance
RR: how many repeat customers?
Andrew:
6 key first installs fairly significant repeat orders
RR: in one case sold 1 unit a month and a half ago to customer, follow on for 5 units
sales cycle shortening -- awareness and ref accts shortening cycle (shortest less than an hour)
leading indicators look positive regarding continuing the trend
purchase decision being made faster based on appearance of Nomad as established product in market
initially estimated average 2.5 Nomads per dealer
avg number of nomads to dealer moving to 4 or more
larger initial orders now have multiple prospects for 20-40 unit range, one for 75 units
starting to see indications of product establishment and brand awareness
Andrew:
still blocking and tackling re getting out to demo it
major Chevy dealer in mid-Atlantic has 15 units called re customer needs more units
Tom:
25-35% brand recognition from cold calls of dealers
At major auto aftermkt trade show, 80% people have heard of Nomad
RR: moving to the point where the harvesting is easier to do
increase footprint, increase sales activity, more efficient channels
Stryker Brigade order for 10 units, preparing to ship shortly
pre-solicitation for 2 units for option of up to 250 units for Stryker
avg selling price $6,000
meaningful potential
number would correlate to equip 1/2 to 2/3 of a brigade's full requirement
out of $6.4M in 05 appropriations,
$2.4M piece is associated to mounted warrior program
250 unit order is sole source solicitation.
mvis is only source that meets their requirements
day/night readability, compatibility with FBCB2 and weapons sighting
military maintenance is huge market
commercial aviation is obvious choice, given very positive recent US Air Force experience
testimonial videos
within automotive, 2 major auto OEMs looking for manufacturing + mfring maintenance equipment
also interested other users of high capacity machines and equipment (semiconductor, consumer packaged goods companies have interest in Nomad).
primary focus for this and next quarter is on automotive dealership
prospects for contracts and oem design wins very good in current quarter and through 2005
sequential increase in contract revs
$3M plus is where we'd like to head for contract
product opportunities through 2005
worked through production problems, building out the channels, prospects going forward are excellent
final comment on financing
with lmra asset available gives mvis flexibility relating to financing reduces cost of capital
desirable strategies to minimize dilution
charles paulson: question - on stock for 7 years - accumulated deficit continuing to pile up
when can we stop going to market for additional funding
stockholders are getting diluted
when does r&d stop and big product wins come through
rr: endemic to category of microdisplays
not unique to mvis
things have taken longer than people have thought wrt
tech and mrkt dev
what's kept us on course is the company has seen oem opportunities becomes systematically more realizable
proj growth for auto hud - mrkt now emerging from 102k units to 2004 to 4M units in 2010
avg selling price $500 down to $200
very significant business
if company had not seen opportunities + sales growth developing
would have reduced dev in tech
sees opps as very very real
capital has a cost and opportunity has a cost as well
another key piece is on finished goods product
flic available for a year
nomad in 2-3 months
delays costly but now see much greater clarity what the product opportunities are
with regards to ramping
reducing to raw numbers, breakeven would require $14-15M
late 2005, early 2006 moved out with delay in Nomad
is very achievable
20-30M capital required to get there
cost of capital goes down as topline ramps
if topline grows from contracts and products will reduce cost of capital
lmra asset will contribute to lower cost of capital.
cp: what is burn rate annualized
rr: 25-26 M annual burn rate
2005 ramp towards 15M quarter burn rate will come down towards latter part of the year
can get to $20M next year then couple quarters of much smaller losses
lmra gives flexibility $42M asset can be collared and hedged to access capital and maintain upside
more desirable position
post bubble downturn -
jim from unterberg towbin: what is prod capability on nomad right now
rr: nomad units held at 50/week capacity 150/week
driven more by inventory and purchasing strategy
jim: yields on those units
rr: quite high as finished goods,
components and subsystems, difficult to parse it out will require more analysis
finished goods quality over 90% yield
returns are low - defects are low
jim: why not more aggressive re lowering cost structure
rr: maintain cost increase sales + mktg budget
need thrust off the runway
ought to reduce engineering effort with flic and nomad
increase in opex had to do with mfring - scrap, inventory, inefficiency, will trend back down
need to maintain r+d -- if they did not feel the solution would be preferred in auto huds and large consumer market and micro
customers are real investment levels are real , making progress moving to products
if successes were'nt being had , would reduce costs
alan robinson: progress on indep sales channel for nomads
rr: advantage is gain presence without large fixed cost
downside is activities are not owned, need to motivate and incentive to sell nomads in addition to other products
ar: backlog
rr: 10 units to stryker at $7000
37 units to other branch more normal ($4000?)
ar: 7k seems higher
rr: new unit has switching capability so that's $7k
requested capability
point on asp is good, not a lot of pricing pressure --
as we move from direct to indirect we'll see increase volume in value prop and roi
people are buying into product
ar: give flic asp this quarter, why is loss $10M cash burn $7
rr: 1.6M is lmra 1.2M is extraordinary operating cost
al: flic is finding market which is connecting to handheld devices
rr: think have opp migrating asp on flic cordless planning intro of expanded cpu version of flic
target is $100 on basic unit plus accessories
jeff neal bear stearns: balance sheet related, explain use of cash raised from financing, did include note payable
-- note payable was lmra obligation
sep did not include lmra obligations
jn: change in paid in capital ?
-- book value
benefical conversion feature adjustments [over my head -- ed]
rr: final thoughts, thanks for joining
theme of why invest why raise capital why not reduce cost
see expanding more legitimate more real
evidence will be seen very soon
contract + prod make greater contribution
if significant oem design win, perhaps that will validate the activities we're participating in
our tech offers compelling advantages
coming together in 2005
RR: Focus on ramping Flic and Nomad. First phase in both cases is behind us.
Value and demand of products is no longer in question. In last 4 weeks of quarter overcame production difficulties and now have sustainable production.
Focus on blocking and tackling coming to market.
Flic below expectations due to delay of large order from Shell Canada. Rollout from Utilitran delayed somewhat. Past 3 quarters have seen sales comprised of a few large orders.
Flic had strong October, 1500 units. Sales funnel looks very different – larger number of customers. Look for growth and smoothing of Flic revenue. Relationship with Smead is key – well known office products company. Flic well suited to retail channel – Staples, Office Max – shrinkwrapped file management applications. App software provider model of software delivery important to uptake of Flic. Smead launch to reduce price of SmeadLink product. Next front is to perform catalog ordering. JumpTech doing that today, 2005 significant catalog ordering potential.
Make bar code scanning broadly available. Growth in Q4 for Flic. Multiple dist channels starting to take hold. Repeat orders.
Nomad q3 constrained by production problems
only last three weeks of quarter shipping units to customers
quality is good, fixed costs should decline
began rollout in late september
immediate upturn in activity as result of availability of units
reference accounts, media awareness, targeted telemarketing
set targets for lead generation qualified requests
increase in sales activity across the board in October
400 dealers requested demos, across all major brands of vehicles.
reference account program helps brand awareness, prospects, feed sales channel with targeted leads effectively. Top 20 Tool award helping awareness.
132 units sold to date.
october best revenue month with Nomad
soliciation for purchase of 37 Nomads + accessories for Army Reserve vehicle maintenance depots
significant new market opening up
miltary sales to come in larger unit chunks; a lot of opportunities for Natl Guard and other branches of military
completed highly successful test for Air Force maintenance crews
recently seen very strong and growing interest in military maintenance
lots of money available for purchase of e-tools
broad categories of budget available to support purchase of tools like Nomad
targeting more activity from independent reps
growing footprint by adding more reps
adp + reynolds & reynolds will distribute Nomad in Canada & US later in this quarter
large leads coming from independent reps
add software + solution providers as part of disty channel
growth from repeat orders as well
Andrew:
power user groups of Nomad are developing
positive feedback affirming use of Nomad
users don’t take it off their heads
tool is boosting productivity, grass roots success and acceptance
RR: how many repeat customers?
Andrew:
6 key first installs fairly significant repeat orders
RR: in one case sold 1 unit a month and a half ago to customer, follow on for 5 units
sales cycle shortening -- awareness and ref accts shortening cycle (shortest less than an hour)
leading indicators look positive regarding continuing the trend
purchase decision being made faster based on appearance of Nomad as established product in market
initially estimated average 2.5 Nomads per dealer
avg number of nomads to dealer moving to 4 or more
larger initial orders now have multiple prospects for 20-40 unit range, one for 75 units
starting to see indications of product establishment and brand awareness
Andrew:
still blocking and tackling re getting out to demo it
major Chevy dealer in mid-Atlantic has 15 units called re customer needs more units
Tom:
25-35% brand recognition from cold calls of dealers
At major auto aftermkt trade show, 80% people have heard of Nomad
RR: moving to the point where the harvesting is easier to do
increase footprint, increase sales activity, more efficient channels
Stryker Brigade order for 10 units, preparing to ship shortly
pre-solicitation for 2 units for option of up to 250 units for Stryker
avg selling price $6,000
meaningful potential
number would correlate to equip 1/2 to 2/3 of a brigade's full requirement
out of $6.4M in 05 appropriations,
$2.4M piece is associated to mounted warrior program
250 unit order is sole source solicitation.
mvis is only source that meets their requirements
day/night readability, compatibility with FBCB2 and weapons sighting
military maintenance is huge market
commercial aviation is obvious choice, given very positive recent US Air Force experience
testimonial videos
within automotive, 2 major auto OEMs looking for manufacturing + mfring maintenance equipment
also interested other users of high capacity machines and equipment (semiconductor, consumer packaged goods companies have interest in Nomad).
primary focus for this and next quarter is on automotive dealership
prospects for contracts and oem design wins very good in current quarter and through 2005
sequential increase in contract revs
$3M plus is where we'd like to head for contract
product opportunities through 2005
worked through production problems, building out the channels, prospects going forward are excellent
final comment on financing
with lmra asset available gives mvis flexibility relating to financing reduces cost of capital
desirable strategies to minimize dilution
charles paulson: question - on stock for 7 years - accumulated deficit continuing to pile up
when can we stop going to market for additional funding
stockholders are getting diluted
when does r&d stop and big product wins come through
rr: endemic to category of microdisplays
not unique to mvis
things have taken longer than people have thought wrt
tech and mrkt dev
what's kept us on course is the company has seen oem opportunities becomes systematically more realizable
proj growth for auto hud - mrkt now emerging from 102k units to 2004 to 4M units in 2010
avg selling price $500 down to $200
very significant business
if company had not seen opportunities + sales growth developing
would have reduced dev in tech
sees opps as very very real
capital has a cost and opportunity has a cost as well
another key piece is on finished goods product
flic available for a year
nomad in 2-3 months
delays costly but now see much greater clarity what the product opportunities are
with regards to ramping
reducing to raw numbers, breakeven would require $14-15M
late 2005, early 2006 moved out with delay in Nomad
is very achievable
20-30M capital required to get there
cost of capital goes down as topline ramps
if topline grows from contracts and products will reduce cost of capital
lmra asset will contribute to lower cost of capital.
cp: what is burn rate annualized
rr: 25-26 M annual burn rate
2005 ramp towards 15M quarter burn rate will come down towards latter part of the year
can get to $20M next year then couple quarters of much smaller losses
lmra gives flexibility $42M asset can be collared and hedged to access capital and maintain upside
more desirable position
post bubble downturn -
jim from unterberg towbin: what is prod capability on nomad right now
rr: nomad units held at 50/week capacity 150/week
driven more by inventory and purchasing strategy
jim: yields on those units
rr: quite high as finished goods,
components and subsystems, difficult to parse it out will require more analysis
finished goods quality over 90% yield
returns are low - defects are low
jim: why not more aggressive re lowering cost structure
rr: maintain cost increase sales + mktg budget
need thrust off the runway
ought to reduce engineering effort with flic and nomad
increase in opex had to do with mfring - scrap, inventory, inefficiency, will trend back down
need to maintain r+d -- if they did not feel the solution would be preferred in auto huds and large consumer market and micro
customers are real investment levels are real , making progress moving to products
if successes were'nt being had , would reduce costs
alan robinson: progress on indep sales channel for nomads
rr: advantage is gain presence without large fixed cost
downside is activities are not owned, need to motivate and incentive to sell nomads in addition to other products
ar: backlog
rr: 10 units to stryker at $7000
37 units to other branch more normal ($4000?)
ar: 7k seems higher
rr: new unit has switching capability so that's $7k
requested capability
point on asp is good, not a lot of pricing pressure --
as we move from direct to indirect we'll see increase volume in value prop and roi
people are buying into product
ar: give flic asp this quarter, why is loss $10M cash burn $7
rr: 1.6M is lmra 1.2M is extraordinary operating cost
al: flic is finding market which is connecting to handheld devices
rr: think have opp migrating asp on flic cordless planning intro of expanded cpu version of flic
target is $100 on basic unit plus accessories
jeff neal bear stearns: balance sheet related, explain use of cash raised from financing, did include note payable
-- note payable was lmra obligation
sep did not include lmra obligations
jn: change in paid in capital ?
-- book value
benefical conversion feature adjustments [over my head -- ed]
rr: final thoughts, thanks for joining
theme of why invest why raise capital why not reduce cost
see expanding more legitimate more real
evidence will be seen very soon
contract + prod make greater contribution
if significant oem design win, perhaps that will validate the activities we're participating in
our tech offers compelling advantages
coming together in 2005
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