Flying high with AYSI
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Never mind, I found it. Sorry.
Where did you find the results? I checked the company website, but didn't find anything.
Thanks,
Mat
The article is great and thanks for helping to spread the word. Another portion of the report that I was happy to read was the update on the Indonesia plant. I would have preferred more detail from AYSI than the building and costs, but it at least provides evidence that the plant is moving forward. Good news for AYSI shareholders.
Mat
As a long term AYSI investor, the recent volume and price performance have been very encouraging. I prematurely reduced my shares by 10% around $1 and may lighten a little more if the recent performance continues, but hopefully company transparency and communications will improve so the company performance can continue to be reflected more accurately by the market.
AYSI sent out a newsletter earlier today with the following information. You can get on distribution for the newsletter from the AYSI website. It is marketing, but still good info.
Mat
Arcoplate Cures Wear
March 2014:
The wearing of metal parts can be defined as the gradual decay or decomposition of the metal itself. When a part becomes so deformed that it cannot perform adequately it must be replaced or rebuilt. While the end results of wear appear similar, the causes of wear are different. It is essential to understand the wear factors involved before choosing a wear protection option.
Wear can be divided into 5 main categories:
abrasive, adhesive, corrosive, high temperature, and high impact.
Abrasion:
Foreign materials rubbing against a metal part cause abrasive wear. Accounting for 55-60 % of all wear on industrial metal components, abrasive wear is considered a group of wear problems that can be further sub-categorized to low-stress scratching abrasion, high-stress grinding abrasion, and gouging abrasion.
Adhesive:
This accounts for as much as 15 % of all wear resulting from the non-lubricated friction of metal parts. Metal surfaces, regardless of their finish, are composed of microscopic high and low areas. As metal surfaces slide against each other, the high areas are broken and tiny fragments of metal are torn away. The continual removal of metal, roughens the working surface, and contributes to more rapid wear.
Corrosive:
Ferrous metals are subject to many forms of corrosion and each one can cause wear damage. The most common type of corrosion is rust. Rust transforms the surface of a metal into oxide that eventually flakes off reducing the original thickness of the metal.
High Temperature:
Heat affects the metal's micro-structure and generally reduces its durability. The wear resistance of most alloys diminishes when exposed to high heat in service due to softening from inadvertent tempering. A major cause of metal failure from high temperature service is thermal fatigue or fire cracking. This results from repetitive intense heating followed by quick cooling. The repeated expansion and contraction caused by this thermal cycling eventually exceeds the ability of the metal to recover and causes deep cracking.
High Impact:
When the stress on a metal component exceeds the elastic limits of the metal it deforms beneath the point of impact and laterally across the surface away from the impact point. Very brittle metal cannot withstand deformation so it may crack from either a severe blow or repeated lighter blows.
Even if the metal is ductile enough to avoid cracking, repeated impact often compresses the surface, sometimes causing the metal to 'mushroom' at the edges and eventually chip off.
No matter which problem is wearing you out, Arcoplate has a solution. Call or e-mail a local representative to access your needs.
Good article. I tried to post a response to the article, so hopefully it shows up. Thanks for spreading the facts about AYSI. Too bad the company has a hard time doing that for themselves. Continued performance at these levels will overwhelm the poor communications, but at least we are headed in the right direction.
Mat
Great information! Too bad AYSI won't let you represent them for PR and announcements. AYSI could get the visibility needed to achieve a valuation more consistent with sales and revenue.
Mat
Nice article Dave. Factual and to the point. Still a long term investor, but I did unload 10% with the current pop.
Mat
I have been a loyal sharholder (sap?) with AYSI for a number of years. I was always pleased that there was no dilution and what appears to be a good product. I have bought periodically on dips, but no more. The lack of interest in the shareholders that have provided capital for this company is horrendous, even though it may be legal. If there is a way to establish a shareholder representative to view the books, I support that 100%. The only option that makes sense is the "run the shareprice down to reduce the costs to go private". Communications have always been poor, but AYSI management is clearly not stupid. Clearly my skeptical trust has not been adequate and was faulty.
Mat
I appreciate that AYSI has posted the last 3 quarters over the past 6 weeks, and hopefully that action helps position the company favorably for the needed debt to complete the Indonesia construction. It is frustrating that the debt has not been acquired, but on the other hand I would prefer that AYSI obtain the most favorable option available. I have seen numerous other companies of this size who don't hesistate to dilute the stock or over-extend. More transparency would be ideal, but AYSI has shown an ongoing ability to generate sales and associated income. Still a risky investment and the ore market is turning unfavorable, but the upside still exists.
Mat
It is frustrating we had to wait this long for the first quarter and no comment about the last two quarters. It is good to know that demand was still high, but that was 6 months ago so it has to be tempered a bit. It is good that there has been some small progress in Indonesia, but that opportunity remains in jeopardy until funding is secured. I have always been happy with the fact that AYSI has not diluted its stock, but that may be necessary if this continues much longer. I still have a decent investment in AYSI and remain cautiously optimistic about the future.
Mat
You have summarized my concerns as well. One has to wonder what other variables (new management that has now left, other costs like Kostecki cafe, racing sponsorship) are affecting margins that are not related to the core business.
It is particularly upseting that we have heard nothing about Indonesia progress or what happened with the board. As long as we have waited, one must start to assume the worst. I am glad they have not resorted to dilution and I plan to implore Gene and Barry to communicate more details, but I expect to start to reduce my position in AYSI over the next few months.
Best of luck to all,
Mat
Thanks for checking in RAW, I missed you soo much. I have to give you credit for being consistent. Although it is true that AYSI has been far too much of a roller coaster that doesn't communicate well, your decisions of when to check back in and bash never quite ring true. AYSI certainly has not met my expectations, but I still contend there are far worse companies out there. Fortunately you are way too smart to invest in this company and I am thankful for that fact.
Mat
Nice to have some interest in AYSI. A little news on management, listing, or sales could give us a significant boost.
AYSI is quite the roller coaster thrill ride when it comes an investment. The highs and the potential make you want to ride again and again, but what it does to your stomach with announcements like this make you want to get off. I continue to hold my shares, but I can't invest more with this kind of uncertainty and potential implications under the surface. I know I am preaching to the choir, but more transparency is needed. Based upon the past track record of production I want to give AYSI the benefit of the doubt, but periodic smoke events typically indicate an underlying fire, particularly with smaller companies. Best of luck to all.
Mat
As it turns out, I had another investment get bought out, freeing up some cash to buy 10K of AYSI @$1.20. Good price considering recent performance and my expectations for the rest of the year. I expect AYSI to approach $2 again over the next 6 months.
Mat
I can't say I am surprised or disappointed by the results. It is decent and certainly the current earnings, coupled with mining expansion, and AYSI potential growth, make this a fantastic buy at this price. AYSI is also my largest position, but I really don't have any additional stock cash to invest and prefer to not become too concentrated either. I expect the last quarter to be very similar (~$5M sales) and it would be nice to see the rest of the year comparable to $6M+. I am satisfied with where AYSI is at today and look forward to the next 6 months.
Mat
A good quarter in my opinion would be ~.08 based upon past seasonality. I just hope we don't have to wait too much longer...
Fantastic News! I sent an email to Gene two weeks ago asking if AYSI still planned to put the financial information on their website and what was the expected timeframe for completion. Gene did not respond to my email and I am far happier with this formal response. AYSI is well positioned for continued growth and I look forward to the next quarterly report that we should see anytime now. As Gene stated in his Chairman letter, Congratulations to the AYSI team!
I would be very happy with anything north of .08. As for additional mills, I expect Indonesia is at least 2 years out. I hope I am wrong, but between, permits, design, construction, and startup, I think two years is ambitious.
Patience has certainly been rewarded. Just yesterday I was asking whether I should unload another 20K shares, but thankfully I was still pondering the move. Congrats to all of the those who held on, but I certainly understand those who decided the risk was too high for the obscure prospects for reward. If ongoing operations continue at the rate of this report it should be a very rewarding year and future for AYSI shareholders.
Mat
I went ahead and made a contribution to the DD trip because I am sure a visit to the facilities will provide significant return. I hope in addition to notes, you can take a digital camera and get some pictures of the area and facilities. Have you discussed the potential trip with Gene? Best of luck.
Mat
Investors have to like the current price action. I have unloaded about 15% during the rise and I am hoping for some good news for the Holiday season. Would be great to stay above $1 for awhile and then get some positive sales info. AYSI is certainly not a good long term investment until management credibility is restored, if ever, but short term gains are always welcome. Happy Thanksgiving to the Ihub community!
Rawnoc, Please don't. I would hate to see you invest in a POS...
Dave,
Thanks for sharing the information and your perspective. My faith in AYSI has significantly degraded, but I have not abandoned my investment quite yet. Additional communication by the company would be beneficial, but I fear the credibility is shaken dramatically and confidence will only be restored by a combination of communication and improved performance. I am also afraid that the drain of the Indonesia expansion costs will lead to decreased profits and possibly dilution. I was hoping to see an increased quarterly revenue base to counter my expected reduction in profits. Unfortunately we observed stagnant revenue and decreased profitability.
Mat
AYSI - I still have alot of shares, but my confidence is waning a bit. Since FINRA, the volume has completely dried up making me wonder what is behind it. With the 8 M in back orders you would expect a great quarter, but the new facilities are a big wildcard. When I first interacted with Gene three years ago, I was impressed, but his recent behavior is strange at best. I haven't given up, but I must admit I am a bit nervous.
Mat
Skoal tobacco, now I get it!?! I always thought AYSI was more of a Copenhagen crowd...d#%$n liars!
Wow, that is high praise to compare one of my posts to Bobwins. I am certain I am not worthy of it, but thanks anyway.
By the way, I agree that the product is exceptional and I bought some additional shares this morning on the news. It is my biggest holding, but I definitely thought it is a buy based upon the news for the long term assuming continued favorable economic conditions. Best of luck to all, AYSI has been good to me in the past and I do have confidence going forward, although there is significant room for communication improvement.
Mat
My two cents: I am concerned with the poor communication, but I have to agree with lf on the balance that the company has been heading in the right direction for awhile. Some speculation on my part:
Could it be that the company started on a third mill, but the nature of orders has changed such that real estate at Malaga is now the constraining variable? I notice the real estate for Indonesia is significantly larger.
I would be interested to know how AYSI is financing the new facility. This will be very big for shareholders. If the FINRA accusation has merit, the current slide could be based on concerns of financing/dilution. Purely speculation, but another explanation.
Based upon the past, now that I know the company was working this Indonesia deal, I am not surprised we aren't getting updates and what we get is garbled. AYSI management has historically spent their time on the business side and the communications has always suffered. This is not an excuse, but may be a fact.
Details of this expansion will be critical to shareholders. My biggest fear is that the financing will over-leverage AYSI and any demand lull will drive them underwater. Ongoing high demand through the establishment of Indonesia will be critical. It will make me feel alot better if there is another non-Australian contractual agreement that surfaces in the near future. For the short term we will hopefully see increases in revenue and if AYSI convinces the investing community that Indonesia will take off, look out! Unfortunately, with the poor company communications, the investing community may not be convinced until late in the party.
May you live in interesting times will be an understatement for AYSI for the coming year...
Wow, I thought for sure there would be additional detail in the 10Q. I just sent an email to Mr. Kostecki asking that the company provide an update on expansion. If we have to wait another 3 months for news, this will be an unpleasant quarter indeed!
Disappointing,
Mat
A blowout would have been nice, but the information today does confirm that AYSI is doing fine. Hopefully the 10Q will speak to the 3rd mill and if mill costs reduced profits for this quarter, that is an excellent investment for the future. If super-acro demand is truly growing, a third mill starting up in this quarter will bode very well for the rest of this year and the current price will be a steal. Since AYSI is my largest holding, I doubt I will buy more, but I am comfortable that the current orders pending production will make for a nice ongoing quarter(especially since those orders are as of one month in to the current quarter). The AYSI story continues to evolve nicely in my opinion.
Mat
Raw,
You are entitled to your opinion, but the message below is a gross misrepresentation. For those of us who have followed AYSI for along time, the decreased sales and revenue were based upon the overall economic factors and the company was never really facing an impending "implosion". You exagerated then and continue to now. AYSI has always been small and extremely dependent upon a couple of customers and one industry and therefore can have large swings. There is no evidence it was or is a poorly managed company circling the drain as you imply.
Mat
"which would explain their confidence as the business itself was falling apart. AYSI, as everybody knows, was imploding until they landed a single contract with a single company that turned things around. It was impossible to predict such a miracle literally life-saving contract before it happened yet some people were extremely confident in the future of the company even as things were imploding."
I am happy to see consolidation at $3. The next bit of news should give us a nice spring board from the current level. Announcement of the 3rd mill completion, maybe starting the 4th, and another couple of quarters of strong earnings should propel AYSI back toward that Australia trip goal of $5.
Mat
Gil,
Nice analysis and insight. The AYSI future looks bright.
Mat
Three PRs so far this calendar year? What is up? If we average 3 every two months, that would be 18 for the year! We will all be very happy if there is that much good news in CY10!
Could it be that after focusing on the product, manufacturing, and sales in CY09, the company is now transitioning to focus on getting the word out and growing shareholder value? If so, that would be a very good management strategy that could reward the company and shareholders handsomely! Another data point that should instill confidence in shareholders for AYSI management leadership!
Mat
Dave,
What made you get a new Blog? Thanks for sharing your conversation with Bud. If you call him back, it would be very interesting to know what AYSI applications are currently in use in the U.S. and by whom. The life projections discussed in today's PR are very compelling and it would be great to have that type of analysis with pictures to match (standard plate at X hours vs. acroplate after similar use and X hours). That would be a powerful tool to promote sales.
P.S. I was surprised at the ho-hum reaction to the PR today. It was well-written and has large implications, but I guess AYSI is too small to move on that without meaningful sales to back it up. The good news is that the network is growing internationally and once capacity is available, we may see some significant results...
Thanks,
Mat
Come on Gil, you can't attest this to Gene, he's lazy. This is clearly the work of Bud who was probably hired by Alan. Slackers! It would be a travesty if AYSI established a toe-hold in the U.S. Oh well, time to go back and sit on the couch...
The energy on the board is commendable and I hope we can get away from the personal arguments and back to AYSI. AYSI communication has been poor, has improved, but still has a long way to go. Still looks like an investment with huge upside to me. Best of luck to all whether you invest in AYSI, or not.
Mat
Nice table of possibilities. I am guessing .07 with some additional mill 3 expenses.
Mat
One factor that can't be stressed enough is the lack of dilution demonstrated by AYSI over the years. This is a noteworthy datapoint for a microcap that has more than doubled capacity organically and apparently intends to double it again without increased debt or dilution. If AYSI can continue to grow capacity, sales, and net income organically, all shareholders will be rewarded in the long run.
I have experienced other microcaps that have great communications and appear to have a promising future, only to find out the communications were a clever smoke screen and all shareholder value is lost once the smoke clears. In alot of ways I prefer the poor communication over misinformation, dilution and debt.
Obviously it would be great to have the best of both, but I have yet to see that in a microcap and I have been investing in micros for over a decade.
Mat