On January 15, Vectrix released a regulatory announcement titled "Preliminary Results." Thanks to some ABG reader comments that pointed out some just how bad the news is in this report, I thought it'd be a good idea to mention this on the front page. The short version: In 2007, Vectrix built 2,002 vehicles (the $12,000 scooter seen above) but sold just 123 of them and now has had a lot of debt.
Here are some key quotes from the statement:
During the 2007 financial year, we built 1,775 vehicles and sold in to dealers 462 of which 68 sold out to consumers. Through calendar 2007, we have built 2,002 vehicles and sold in 550 to dealers of which 123 sold out to consumers. The key financial impact of this is that for financial 2007 production and sales were not aligned and, as a result, both accounts receivable and inventory are much higher than expected. As we began financial 2008, we adjusted production due to slower than expected sales and we are increasing the number of dealers in our distribution network to accelerate vehicle sell through. [...]
While the Company has launched an innovative vehicle and created significant product awareness with consumers, dealers and government officials in the EU, North America and Australia, we have been slow to convert enthusiasm into consumer sales and as a consequence our sales results are running significantly below management's pre-IPO expectations. As a result of lower than expected sales and higher that [sic] expected inventories and a U.S. GAAP requirement that we forecast in a manner consistent with historical sales and trends, we incurred a US$9.1 million charge in cost of goods sold related to batteries and finished goods.
You can read the entire thing at the London Stock Exchange website. The question for us is, how long should we wait before we put Vectrix in the has-been pile? 2007 saw the launch of the MAXI Scooter, and Vectrix does have dealerships in seven countries now - will 2008 be the year these expensive but cool electric scooters catch on? And what's happening with the 1,879 unsold scooters?
Here are some key quotes from the statement:
During the 2007 financial year, we built 1,775 vehicles and sold in to dealers 462 of which 68 sold out to consumers. Through calendar 2007, we have built 2,002 vehicles and sold in 550 to dealers of which 123 sold out to consumers. The key financial impact of this is that for financial 2007 production and sales were not aligned and, as a result, both accounts receivable and inventory are much higher than expected. As we began financial 2008, we adjusted production due to slower than expected sales and we are increasing the number of dealers in our distribution network to accelerate vehicle sell through. [...]
While the Company has launched an innovative vehicle and created significant product awareness with consumers, dealers and government officials in the EU, North America and Australia, we have been slow to convert enthusiasm into consumer sales and as a consequence our sales results are running significantly below management's pre-IPO expectations. As a result of lower than expected sales and higher that [sic] expected inventories and a U.S. GAAP requirement that we forecast in a manner consistent with historical sales and trends, we incurred a US$9.1 million charge in cost of goods sold related to batteries and finished goods.
You can read the entire thing at the London Stock Exchange website. The question for us is, how long should we wait before we put Vectrix in the has-been pile? 2007 saw the launch of the MAXI Scooter, and Vectrix does have dealerships in seven countries now - will 2008 be the year these expensive but cool electric scooters catch on? And what's happening with the 1,879 unsold scooters?
Related:
[Source: London Stock Exchange.com]
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