pericoach dcf + burette numbers

Chatting with a few posters and throwing around some potential DCF numbers based on the anticipated sales of the PeriCoach from the presentation.

As they have announced, ALT are planning a 50,000 unit production run next year, so being very conservative and assuming they produce and sell 10,000 units (20% of expected).

Cost of unit initially (assumed) = $70
Maintenance (assumed)= $5
Sale Price (annual) = $360
Profit = $285 p.a or $23/month (scale back to $15 conservatively)

10,000 units sold next year would result in profit of $1.8M p.a (just from domestic sales).

Allowing for a $1,000,000 raising at say 2.5c would see an additional 40M shares issued, so total shares 600M on issue. Considering they are roadshowing and have in the past done at a premium, I used 2.5c to be reasonable.

On a P.E of 13 you come to a 4c valuation.

* This is based purely on the sale of 10k PeriCoaches next year domestically without factoring in burette sales.

The figures get very interesting when you start putting in their target of 50k PeriCoaches as actual sales.

50,000 units sold next year would result in profit of $9M p.a.

On a P.E of 13 you come to a 20c valuation.

* This is based purely on the sale of 50k PeriCoaches next year domestically without factoring in burette sales.

Obviously to fund 50k PeriCoaches at a cost of $3.5M (likely less with economies of scale but just using the higher end of cost to be conservative), they would require some finance facility. IMO this is achievable if they can demonstrate sales of 10k units.

The last example includes sales from the burette in both Taiwan and Brazil. Remember that Taiwan sales are expected to be around $8M p.a after the ramp up period and Brazil to be $4M p.a - using $1.5M for each is very conservative.

While the double digits figures seem overly bullish, when you look at the actual figures used and how they are very conservative, below forecast sales and using high range costs it starts to look achievable.

Remembering any revenue in excess of $1.2M sees ALT cashflow positive, it will only take success in either Brazil, Taiwan or PeriCoach to achieve this next year. Achieving all 3 brings in the double digit valuations and cash to the bottom line.

At this stage, all a financial modelling excercise until they get out there and sell the things. However, not hard to see the potential in both products for 2014 if executed properly.