Alloy Steel Inc. (fka AYSI)

[Swick984]

Looks like a solid quarter for AYSI after the last few weak quarters. Sales of $5.6 million and reported EPS of $0.08 both higher than my expectations. EPS excluding the f/x gain was $0.065. Gross margins recovered and SG&A was down a good amount. Both good things.

I think we may see improved results for the remainder of the year. Iron ore prices have increased a good amount through the year and the share prices of iron ore producers have significantly recovered. I posted an article a few weeks back on how we may see a rebound in investment which would benefit AYSI.

The comps for the remainder of the year should be quite positive.

I still don't understand the accounting behind the acquisition. It appears as though they have not completed the purchase price allocation process, so they're just showing a reserve against Shareholders' Equity. Not sure if the results are even flowing through the P&L at this point... I'm hoping to get more clarity and will let everyone know what I find...