Valence Technology Embarks Upon Manufacturing Expansion to Meet Anticipated Demand for its Lithium Phosphate Battery Packs
12 March 2008 - 12:00AM
Business Wire
Valence Technology, Inc. (NASDAQ: VLNC) today announced it plans to
increase the company�s manufacturing capacity to meet anticipated
demand for its safe, industry-leading Lithium Phosphate energy
storage systems. By March 31, 2009, Valence plans to have in place
an expanded manufacturing capacity of $35 million to $50 million
per quarter to support anticipated product sales. As the company�s
manufacturing capacity expands, Valence believes it can achieve
gross margins of approximately 30 percent of revenue with operating
profit from 17 percent to 20 percent of revenue. Valence recently
announced it had secured an agreement with Tanfield Group Plc that
will result in the purchase of up to $70 million of product during
the first phase of the contract to power zero emission,
all-electric commercial delivery vehicles. The Valence battery
systems are being installed in leading-edge vans and trucks
produced by Tanfield�s UK-based trading division, Smith Electric
Vehicles, the world�s largest manufacturer of electric vans and
trucks. �Increasing our capacity to manufacture additional battery
systems will assure we have the capability to fulfill the
anticipated demand we believe to be building in our sales
pipeline,� said Robert L. Kanode, CEO and president of Valence
Technology. �And, with operational full service fulfillment centers
in Europe, North America and China we are ready to provide the
service and support our customers need.� About Valence Technology,
Inc. Valence Technology developed and markets the industry's first
commercially available, safe, large-format family of lithium
phosphate rechargeable batteries. Valence Technology holds an
extensive, worldwide portfolio of issued and pending patents
relating to its lithium phosphate rechargeable batteries, the only
intrinsically safe lithium rechargeable battery. The company has
its headquarters in Austin, Texas, and facilities in Las Vegas,
Nevada, Mallusk, Northern Ireland and�Suzhou, China. Valence is
traded on the Nasdaq Capital Markets under the ticker symbol VLNC
and can be found on the internet at www.valence.com. Safe Harbor
Statement This press release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, including our statements that we are positioned to realize
better execution, improve gross margins, continue to reduce
production costs and expenses, realize a strong year in both
customer orders and revenue and our financial guidance. Actual
results may vary substantially from these forward-looking
statements as a result of a variety of factors. Among the important
factors that could cause actual results to differ are: the impact
of our limited financial resources on our ability to execute on our
business plan and the need to raise additional debt or equity
financing to execute on that plan; our uninterrupted history of
quarterly losses; our ability to service our debt, which is
substantial in relationship to our assets and equity values; the
pledge of all of our assets as security for our existing
indebtedness; the rate of customer acceptance and sales of our
products; the continuance of our relationship with a few existing
customers, which account for a substantial portion of our current
and expected sales in the upcoming year; the level and pace of
expansion of our manufacturing capabilities; the level of direct
costs and our ability to grow revenues to a level necessary to
achieve profitable operating margins in order to achieve break-even
cash flow; the level of our selling, general and administrative
costs; any impairment in the carrying value of our intangible or
other assets; our execution on our business strategy of moving our
operations to Asia and our ability to achieve our intended
strategic and operating goals; the effects of competition; and
general economic conditions. These and other risk factors that
could affect actual results are discussed in our periodic reports
filed with the Securities and Exchange Commission, including our
Report on Form 10-K for the year ended March 31, 2007, and the
reader is directed to these statements for a further discussion of
important factors that could cause actual results to differ
materially from those in the forward-looking statements.
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