Replies to post #4328 on Alloy Steel Inc. (fka AYSI)

[gilead23]

bad quarter brighter skies

That 3.2 million order should mean next Q will be significantly profitable. I think it is evidence that my inventory theory was correct given the size of the order corresponds well with the excess inventory level.

A 3.2 million dollar super plate order plus say just 800k in other revenue should result in a 4 million dollar quarter. Certainly good news especially if we can get an uptick in mining.

[latin blood]

I see a couple of significant topics in the 10Q:

1)

The Company has recently been advised of its successful tender for a significant contract with BHP Billiton Ltd, with the first order release being received by the Company to the value of approximately $3,200,000 subsequent to the reporting date.

In business terms this means that they have signed a contract (I wonder why they didn't provide explicitely the contract amount), of which the first release against this contract is for 3.2 million (US dollars?). I'm not very familiar with this relationship, was BHP already a customer of AYSI? When a company like this signs a contract, it means that the technical departments have already given their OK to the quality and usefulness of the product, the Purchasing department does the negotiation usually including an estimated volume for a period of time to be bought, and they negotiate the unit price based on this. Then it goes on a purely quantity ordering scheme where Purchasing is no longer involved, and the Production department requests the quantities they need of the product to AYSI - thus the term used in the 10-Q of the "first order release".

2)

Due to the continuing demand for Arcoplate, we have decided to postpone the development of the 3-D Pipefitting Cladder process... Due to the continuing demand for Arcoplate, we have decided to postpone the development of the 3-D Pipefitting Cladder process

This sounds to me that they are expecting the manufacturing facility to be running at full speed for the foreseable future.

IMHO AYSI has entered a bull run that will take some time because we will likely need to wait for the next Q's. I will not sell anytime soon unless it goes ballistic too quickly.