This remains my largest long position, though I'm holding about 50% cash, plus shorts & hedges.
AYSI's potential remains huge; the company wouldn't have bought the Indonesian site if it didn't think that was the case. Remember that in addition to wear plates, the Arcoplate process has applications in chutes, pipes, etc. It may take a while for the company to realize its potential though.
Step one seems to be to perfect the manufacturing process used in the second mill. Maybe Dr. Mofflin, the engineering Ph.D., and new addition to the board, can help with that.
As the company noted last summer, they're wary of expanding capacity until they can be confident in producing quality products consistently at higher volumes. There's a saying in business, "I'd rather turn you down than let you down", and that seems to be AYSI's approach.
As I mentioned before, I wouldn't expect a strong Q2 based on this commentary. Maybe we'll get lucky and see a strong quarter or two in the second half of this fiscal year.
The good news in the interim is that the company remains profitable and its balance sheet has continued to strengthen. And its got a strong leadership team now instead of being a one- or two-man show.
