"your virtually asking them to publicize any and a
Post# of 22940
Posted On: 07/26/2016 12:04:23 AM
"your virtually asking them to publicize any and all forecasting models they may or may not even have in a very limited capacity. until they know the capture rate of the ever increasing RFQs in addition to other POTENTIAL streams of revenue what you are asking for is not possible to disclose. not to mention doing so could put them at a competitive disadvantage."
first - the company has already blatantly and repeatedly publicized its competitive advantage - we already know it and that is why those that i converse with frequently invested and have remained invested:
-chinese mfg which provides leverage on offsets - 20-30% instant cost reduction
-NAVAIR certification
-speed to market on orders drastically under competition (from 32-50 weeks down to as low as 4)
-competitive capacity is strained
-competitive landscape is complacent.
this is not unknown as they say it rather upfront to their potential investors and bankers in the2014 and 2015 plans (below is excerpted from 2015 plan):
"Competition
The Company is the only manufacturer of SAE-‐AS certified aircraft component parts in China. Imported parts in China are subject to 24% import tax and duty. The Company’s management has excellent and currently ongoing working relationships with Boeing, Airbus and Embraer.
Neither Minebea nor RBC has made inroads into China from a manufacturing perspective for these parts, nor is it likely that they will anytime in the near future. The standoff over the islands known as Senkaku in Japan and Diaoyu in China is tense, with territorial claims escalating
on a daily basis. This adds to the already tenuous relationship caused by Japan’s refusal to acknowledge its wartime past to the satisfaction of China. Minebea does have plants in Shanghai and Zhuhai, but these facilities produce relatively easy to make ball bearings, DC motors, fan motors and PC keyboard parts. RBC, self-‐ admittedly, has no aspirations to break into China, with recent growth attributed to acquisitions in the U.S. and U.K.
Moreover, neither manufacturer has the incentive to ramp up production to meet market demand, as both Minebea and RBC are satisfied with their respective market shares and are historically disinclined to investing in capital equipment or upgrading facilities. Their logic is simple: it’s a gravy train that we haven’t changed in 30 years; why do anything when all we have to do is raise prices and extend lead times?
This take-‐it-‐or-‐leave-‐it attitude leaves the market wide open for an aggressive new player. From the start, the Company will be able to:
• Deliver orders in as short a time as four weeks (versus 32-‐52)
• Help Boeing, Airbus and Embraer meet offset obligations to China ($17 billion due and payable)
• Sole source to China-‐based airlines and MROs at price points a minimum of 24% less than what they’re paying now
• Do all of the above while maintaining margins of 70%
Pricing Strategy
In regards to export sales, the Company plans to build a tiered global pricing model based on prevailing prices that will avoid a price war with Minebea and RBC. This strategy will:
• Allow our competitors to keep current prices at or near what they’re charging now
• Permit the Company to charge market prices, with a deep spread to maneuver for large orders
• Maintain the status quo: the Company, in effect, is not taking market share away from Minebea and RBC. Instead, it’s taking advantage of de novo business and offset markets in China
• Anticipated average unit selling price: $167
Significantly, this strategy will give the Company the option in three to five years to aggressively carve out global market share, at-‐will, based on price. By not “rocking the boat” at the onset, the Company will build a sales and manufacturing advantage from which Minebea and RBC will find tough to counter, as both Minebea and RBC are running at full capacity with equipment over two decades old. "
so - there is no competitive disadvantage to be had by releasing such numbers - it is already out there in black and white.
second - per my prior post - they ALREADY forecasted in specific detail a 5 year revenue plan when capture rates weren't known and revenue operations hadn't even begun. now that they ARE revenue producing and the SLAs have some apparent teeth (according to IR), they should be in a better position to revenue forecast than they were a year ago. if the prior revenue stream was heavily dependent on expected acquisitions and thus more linear to project - say so.no one is going to crucify mgmt for changing course to a more viable, revenue generating (and cash saving) manner even if the acceleration curve isnt as robust. the company gave a forecast from $4.2 to $149 MM over 5 years (per chart in 2015 plan). if they are or are not going to be able to still ramp up that fast does not change the fact that the competitors are content with the status quo and cant ramp up or are going to dedicate the capital to revamp an aging fleet to do so (per strategy notes).
third - OS wasnt 1.8BB (or 1.9BB) due to a 700-800MM shares "error" that Bill took responsibility for earlier this year. but there is communication from him with those numbers when he was specifically talking about reducing OS by 1.8BB shares from where it started in 2015 (around 3.5BB). there was also talk of another 800MM beyond original 1.8BB that would have put share count around 1-1.2BB. there are numerous posts on OS in early 2016 around those numbers from several shareholders doing future PPS valuations based on his comments surrounding buyback and future OS.
fourth - IRMuse called/referred to me as a basher in a series of tweets when referencing specific posts of mine on here. i have the screenshots of the tweets. they were absurd.
so - in light of the above - what is specific disadvantage/competitive reasoning for NOT updating new 5 year revenue plan even if it is a series of ranges vs the detail provided in 2015? further - what is the damage to PPS/credibility by NOT doing so?
finally - as far as the golden question - cash flow right now is king for existing shareholders. company has 1-1.1BB in shares left before having to increase AS or doing a R/s (which they have been adamant that they will not do). at a 50% discount to current price - that is only $350K if they use up all of it. that does not take into consideration the death spiral that convertible debt would bring in which the price would quickly spiral back down to 0.0001-0.0002 with the aggressive shorting and covering and the discount to market the financiers would enjoy in the process. for $4.2MM in Y1 revenues - company projects $1.5MM in labor and material costs and production overhead alone. granted, the SLA structure shifts many of those costs/burdens off of $TPAC which make them extremely advantageous in the short term cash crunch but the company still has significant overhead and material costs ramping up on the other revenue streams. where does that money come from without a robust, immediate increase in revenues? right now they have $109K of a projected $4.2MM.
i realize most of these boards dont go into any depth or detail in reasoning/debate but if there are serious, long term holders that are concerned with cash flow and revenue ramp up like i am - i would like to engage them in thought and see where the above is askew. more importantly, i would like the company to just update the current plan relative to the last two years and put the speculation and assumptions to bed with concrete numbers backed up by current revenue producing streams in place right now and timelines for others to commence on the SLA front.
though i do not appear to be on their Christmas card list at the moment, i welcome constructive dialogue with IR on the topic as well.
first - the company has already blatantly and repeatedly publicized its competitive advantage - we already know it and that is why those that i converse with frequently invested and have remained invested:
-chinese mfg which provides leverage on offsets - 20-30% instant cost reduction
-NAVAIR certification
-speed to market on orders drastically under competition (from 32-50 weeks down to as low as 4)
-competitive capacity is strained
-competitive landscape is complacent.
this is not unknown as they say it rather upfront to their potential investors and bankers in the2014 and 2015 plans (below is excerpted from 2015 plan):
"Competition
The Company is the only manufacturer of SAE-‐AS certified aircraft component parts in China. Imported parts in China are subject to 24% import tax and duty. The Company’s management has excellent and currently ongoing working relationships with Boeing, Airbus and Embraer.
Neither Minebea nor RBC has made inroads into China from a manufacturing perspective for these parts, nor is it likely that they will anytime in the near future. The standoff over the islands known as Senkaku in Japan and Diaoyu in China is tense, with territorial claims escalating
on a daily basis. This adds to the already tenuous relationship caused by Japan’s refusal to acknowledge its wartime past to the satisfaction of China. Minebea does have plants in Shanghai and Zhuhai, but these facilities produce relatively easy to make ball bearings, DC motors, fan motors and PC keyboard parts. RBC, self-‐ admittedly, has no aspirations to break into China, with recent growth attributed to acquisitions in the U.S. and U.K.
Moreover, neither manufacturer has the incentive to ramp up production to meet market demand, as both Minebea and RBC are satisfied with their respective market shares and are historically disinclined to investing in capital equipment or upgrading facilities. Their logic is simple: it’s a gravy train that we haven’t changed in 30 years; why do anything when all we have to do is raise prices and extend lead times?
This take-‐it-‐or-‐leave-‐it attitude leaves the market wide open for an aggressive new player. From the start, the Company will be able to:
• Deliver orders in as short a time as four weeks (versus 32-‐52)
• Help Boeing, Airbus and Embraer meet offset obligations to China ($17 billion due and payable)
• Sole source to China-‐based airlines and MROs at price points a minimum of 24% less than what they’re paying now
• Do all of the above while maintaining margins of 70%
Pricing Strategy
In regards to export sales, the Company plans to build a tiered global pricing model based on prevailing prices that will avoid a price war with Minebea and RBC. This strategy will:
• Allow our competitors to keep current prices at or near what they’re charging now
• Permit the Company to charge market prices, with a deep spread to maneuver for large orders
• Maintain the status quo: the Company, in effect, is not taking market share away from Minebea and RBC. Instead, it’s taking advantage of de novo business and offset markets in China
• Anticipated average unit selling price: $167
Significantly, this strategy will give the Company the option in three to five years to aggressively carve out global market share, at-‐will, based on price. By not “rocking the boat” at the onset, the Company will build a sales and manufacturing advantage from which Minebea and RBC will find tough to counter, as both Minebea and RBC are running at full capacity with equipment over two decades old. "
so - there is no competitive disadvantage to be had by releasing such numbers - it is already out there in black and white.
second - per my prior post - they ALREADY forecasted in specific detail a 5 year revenue plan when capture rates weren't known and revenue operations hadn't even begun. now that they ARE revenue producing and the SLAs have some apparent teeth (according to IR), they should be in a better position to revenue forecast than they were a year ago. if the prior revenue stream was heavily dependent on expected acquisitions and thus more linear to project - say so.no one is going to crucify mgmt for changing course to a more viable, revenue generating (and cash saving) manner even if the acceleration curve isnt as robust. the company gave a forecast from $4.2 to $149 MM over 5 years (per chart in 2015 plan). if they are or are not going to be able to still ramp up that fast does not change the fact that the competitors are content with the status quo and cant ramp up or are going to dedicate the capital to revamp an aging fleet to do so (per strategy notes).
third - OS wasnt 1.8BB (or 1.9BB) due to a 700-800MM shares "error" that Bill took responsibility for earlier this year. but there is communication from him with those numbers when he was specifically talking about reducing OS by 1.8BB shares from where it started in 2015 (around 3.5BB). there was also talk of another 800MM beyond original 1.8BB that would have put share count around 1-1.2BB. there are numerous posts on OS in early 2016 around those numbers from several shareholders doing future PPS valuations based on his comments surrounding buyback and future OS.
fourth - IRMuse called/referred to me as a basher in a series of tweets when referencing specific posts of mine on here. i have the screenshots of the tweets. they were absurd.
so - in light of the above - what is specific disadvantage/competitive reasoning for NOT updating new 5 year revenue plan even if it is a series of ranges vs the detail provided in 2015? further - what is the damage to PPS/credibility by NOT doing so?
finally - as far as the golden question - cash flow right now is king for existing shareholders. company has 1-1.1BB in shares left before having to increase AS or doing a R/s (which they have been adamant that they will not do). at a 50% discount to current price - that is only $350K if they use up all of it. that does not take into consideration the death spiral that convertible debt would bring in which the price would quickly spiral back down to 0.0001-0.0002 with the aggressive shorting and covering and the discount to market the financiers would enjoy in the process. for $4.2MM in Y1 revenues - company projects $1.5MM in labor and material costs and production overhead alone. granted, the SLA structure shifts many of those costs/burdens off of $TPAC which make them extremely advantageous in the short term cash crunch but the company still has significant overhead and material costs ramping up on the other revenue streams. where does that money come from without a robust, immediate increase in revenues? right now they have $109K of a projected $4.2MM.
i realize most of these boards dont go into any depth or detail in reasoning/debate but if there are serious, long term holders that are concerned with cash flow and revenue ramp up like i am - i would like to engage them in thought and see where the above is askew. more importantly, i would like the company to just update the current plan relative to the last two years and put the speculation and assumptions to bed with concrete numbers backed up by current revenue producing streams in place right now and timelines for others to commence on the SLA front.
though i do not appear to be on their Christmas card list at the moment, i welcome constructive dialogue with IR on the topic as well.
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