AYSI thoughts on report
Cross posting from VMC but probably more useful here. I believe its pretty certain mill 3 is under construction. I am totally puzzled by the split thing. I think the nanotech reference might be the pipe cladding process. They have not announced any other R&D work so not sure what another obvious candidate is. Take a look at MFLU for something that could be in some ways similar and is described as nanotech.
AYSI thoughts on report
First great report as everyone knows. EPS was .087. They generated 2.6 million in cash from operations.
A couple other observations.
First there is a $337k cash outflow for capital expenditures. That tells me its very likely or a near certainty the third mill is underway. This was an unusually high spending level for capex and is in line with their capex spending for mill 2. See the below from the 10Q for the quarter ended 6/08
"The Company is currently funding the construction of the mill from its available cash flow. ..... It is anticipated that the total additional costs to be incurred to complete the mill will be approximately $350,000 including $275,000 already committed for components delivered. Due to a delay in receiving some components, assembly of the mill is continuing and testing is now anticipated to commence during August, with commercial operation commencing in September 2008. "
Second just a couple thoughts on finished goods. The finished goods levels are up a couple hundred k over last Q. Might help a little in next quarters results maybe not. It is interesting though doing a bit of extrapolation. They produced 250k more in inventory than they sold. That means at retail they produced an extra 500k over what was in the income statement. That suggests in a quarter that is 15% shortened they produced about 6.3 million in product. That means capacity for a full quarter is likely at least 7.4 million which is pretty good. It also implies all else equal eps capacity is probably about .12/share.
I bet we get a statement on the new mill quite soon.
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