Yeah, fair some of his criticisms are merited. I wouldn't mind knowing where the Acremy systems are manufactured and maybe some more information on their ability to be able to scale up the production and the security of that supply chain etc. I am assuming as well that we will get a presentation soon that clears up some uncertainty around their business plan and the OEM strategy.
That said, I don't think that contract manufacturing has gone out the window, and I'm expecting some more contract manufacturing following the results of the metal characterization contract. Supposedly that was in the final testing stages a few weeks or even a month ago so there should be something out about that soon. We also have a bigger deal with Chevron potentially in the works and I'm inclined to believe that the reason for the lengthy contract negotiations is that they are trying to balance and blend contract manufacturing with the OEM strategy.
If you want to do larger contracts for manufacturing then you need an increased capacity to do so and like advertised, they would also like to do the manufacturing at the point of need which requires a machine in the vicinity. Selling and leasing machines makes the most sense to cover the initial capital cost of preparing for bigger contracts because I doubt AL3 will be able to cover the costs of new machines in new facilities to services larger orders anytime soon without some sort of machine sale or leasing agreement beforehand.
Overall great news and I'm very keen to see how the trend looks after the next report on earnings and whether she is still keeping her costs relatively low. Keep in mind that this follows from the announcement that they were in 'multiple' contract negotiations with parties in the US defense industry.
On the horizon in my speculative headspace and in some sort of timely order:
- Metal Characterization Contract news & potential follow up contract or sale with US Navy. - AS9100D certification & potential follow up contract with Boeing building upon last two contracts. - Chevron machine sale or expanded contract for manufacturing. - Another Contract for Exxon (nothing heard on that in a while). - News surrounding the 'energy company' that AL3 worked with in AU and was potentially 3D scanning spare part inventory for (old and perhaps dead news). - Contract or machine sale for BAE in Adelaide (long history with Austal and BAE & Acremy system operational in Tonsley for quite some time now).
* Speculative guess - Machine sale or contract manufacturing with Austal in the US.
* Revenue Guess - 4-5M H2 FY23 revenue for a hopeful 8M~ FY23 with a potential positive quarter and a 10-12M~ CY23 with an overall loss? Hopefully being final loss CY23 and some profits CY24? - Would love for someone else to input and speculate on this with me. Am I being too optimistic here? I do feel like there could be a positive quarter this year at the rate we are travelling, and I do see earning tipping a revenue graph and earnings graphs healthily upwards.
* Purely speculation and not financial advice DYOR.
AL3 Price at posting:
6.0¢ Sentiment: Buy Disclosure: Held
(20min delay)