One thing I noticed in the filings in their 13 week budget was the line collections on shipments and deliveries. They have a large ramp up in the 4th week of the plan. This makes me think they are planning on completing a lot of orders in the next month or so.
I don't fully understand this. They say they're giving
all customers with deposits down until 15 January to accept as-yet-unannounced new pricing, but yet they plan to collect cash for shipments straight away. This must mean they're shipping kits straight away, and as you say quite a big ramp up of that after a few weeks. But if they've not yet announced the new pricing and the deadline for acceptance hasn't passed, can we assume those collections will be at the contracted prices?
It cannot represent those orders already paid in full, since there would be no cash receivable for them if they were shipped. I can't see any provision in there for inventory that goes out but for which no cash is received, i.e. those already paid in full.
They also have big number under deposit receipts starting week 12/31/2023, planning to take 117,519 in deposits each week. That's a
lot of new orders. I would suggest they may be overestimating the willingness of new customers to enter the fray and existing customers to increase their exposure. I can't find the number now, but somewhere the paperwork contained information on how many new deposits had been received since the new deposit practice began on October 6th and it was a very low number.
The new deposit practice says you can have a refund if you request it before the notice of commencement. But the notice of commencement comes out of the blue - there is nothing in the proposal to say you get a warning. It would only offer real protection if it were advance warning, i.e. commencement will be in 5 business days, that is your deadline to request a refund. I have commented before that because of the unbalanced inventory and the large number of discrete parts in kit, it is easy to argue that commencement of production is close to immediate in most cases, even with a long lead time.
There is no pressing reason for customers to jump back in with new orders. They don't know the pricing yet. They don't know what the lead times will be. They don't know if they can trust the company. I'm prepared to wager that many will adopt a watch and wait strategy, looking to see if VAF erupts with favourable reports of rapid shipping and low levels of backordered parts before they act.