According to Mercedes Benz, there were 26,756 SLKs sold from January-December, 2011. How many of those had Magic Sky Control?
Looking at the Annual Report and the prior 3rd quarter, it appears that REFR royalties were around $400,000 for the 4th quarter. Since they usually had around $200,000 in royalty fee payments, it appears that the SLK royalties in the 4th quarter were around $200,000. At a royalty of $100-$150 per car, that is less than 2000 SLKs with Magic Sky Control. Or a "take rate" of less than 10%.
Assuming 2000 SLKs with Magic Sky Control, the question is whether that number sold represents a full year of sales, a quarter year, or whatever period? If you assume that it is 6 months of sales, then there would be about 4000 SLKs sold per year with Magic Sky Control.
Assume the same number for SL sales in the future and some lesser number for the Viano. Then you are assuming about $1 million dollars per year in royalties. That leaves a long ways to go to show a profit, given the annual cash burn.
So REFR needs more big contracts.
Anyone else care to guesstimate the sales numbers?
First, Sales (fee income for Q4) was closer to $354K than $400K
Second, I am not sure ALL of the fee income for Q4 is attributable to M-Benz(infact, a reasonable person might say only $154K to $210K is attributable to M-B--just look at the previous quarters fee income ranges from $140K to $207K without M-B). So that implies that total sales (take rate) of SLK's with MSC is lower than you state, by perhaps 50%.
Third, one of the things that stands out for me is that fee income year over year is up on $78,000.00 but the LOSS is up $260,000.00 on a full year basis. What is up with that? That implies as sales grow the losses grow. Really? That's how it works at REFR? When do the losses at least flatten? When does REFR stop raising everyone's wages?(wages and non cash stock were two of the big items in the notes to account for increased expenses) Not to mention that a total Year over Year fee income increase of $78,000.00 WITH the M-B contract and actual unit sales--I am underimpressed. (Monty's Fetid Taco Stand comes to my mind--that increase is only $6500.00 per month!).
I had to laugh at one comment in the press release announcing the conference call: <Having invested over $84 million to date to develop its technology...> not sure I would brag about that Joe! This from a company that states that at FY end <...total shareholder equity of $4,107,000.00.
>>Looking at the Annual Report and the prior 3rd quarter, it appears that REFR royalties were around $400,000 for the 4th quarter. Since they usually had around $200,000 in royalty fee payments, it appears that the SLK royalties in the 4th quarter were around $200,000. At a royalty of $100-$150 per car, that is less than 2000 SLKs with Magic Sky Control. Or a "take rate" of less than 10%.<<
That's the big question. How much of the $350,000+ fourth quarter income was royalty income and how much was fee income? Will they separate out if asked? Or will they use the "we can't disclose that info" excuse?
I will continue to pound the table about price. You want to see additional oems and larger contracts? The price needs to be reduced substantially. Why would Hitachi invest so much time and money, but hestitate to develop the market?
Cricket, you have gained wisdom beyond your years. You are free at last. The SPD yoke has been lifted from your shoulders and you can rise and walk tall again. Joe must now look for another stuckholder to replace you.