RVS Media Thread

I think it is time to start a media thread for Revasum !
After conducting an interview on *****head, Rebecca has now conducted a 2nd interview with Alan Kohler.
It would seem that Revasum will be more open to promoting itself to the investment community, and as such generating more material for this thread.

Below are some interesting bits from the interview ( I've left some bit's out, so jump onto Eureka to read the whole thing )

Let’s move forward to the company. The share price has taken off in the last couple of weeks.

It has indeed.

You got a speeding ticket yesterday from the ASX, what’s commonly called a speeding ticket, a query. In your answer, you refer to an interview you gave to a company, what was it?

*****head.

You gave an interview to *****head and it is the case that the share price seems to have moved after that, like on the day of that. Do you think that *****head interview really was the trigger?

I think it’s a few things. I think the company has been in hibernation somewhat over the last year. We have released some really great news, we brought a brand new product to market, sold the first two into Europe, have an ongoing valuation. We’re pretty close to cash flow breakeven now, margins are up, backlog is up… We released all this good news and the market didn’t really react to it. My thoughts are, we’re kind of coming out now, doing some interviews, kind of re-engaging with the investors over in Australia and highlighting some of that good news that we’ve kind of been releasing in the background. I also think we lost a bit of credibility, lost a bit of trust and now we’re kind of delivering on the promises we made six, nine months ago and that’s getting some confidence back from the investors which is great.

The company listed on the ASX in 2018, but it’s been going for a very long time, hasn’t it?

Yeah, the company in some format has been around for 70 years
…
70? Seven-zero?

Seven-zero, yes, very established business, very established customer base.

And it used to be called Strasbaugh?

Yes.

For most of that time was it called Strasbaugh?

Yes, until 2016, Revasum acquired the assets and IP.

Is that what happened? I couldn’t find any mention of that. So, Revasum was another company that acquired Strasbaugh’s assets?

Yes.

Obviously you’re close to the financials of the business. How come after all this time it’s still losing money?

Yeah, good question. This is part of what I’ve been working on over the last six months. We sell capital equipment as the kind of core revenue stream, which is great, but I always say our tools are too good, people buy this equipment and it can last 20-30 years in the field, it’s almost too good. [Laughs] You sell the piece of capital equipment and previously there hasn’t been a focus on the other revenue streams that should be coming from those capital equipment sales, so consumables revenues, spare parts revenues, service, software… There all these other revenue streams that should be driven by the install base we have out in the field.The last six, nine months, I’ve kind of turned the focus on how do we really tap into those recurring revenue streams so that – look, the silicon market is cyclical, we all know that. When we’re in the downturn, we’re still getting revenue from those recurring revenue streams, so I think it’s taking a hard look at that business model and making sure we’re optimising it to take advantage of the install base we have in the field.

Are there naturally consumables in your products or are you having to put them in?

There are naturally consumables in the products. The best product line from a consumables perspective is our grinder. People have to use grind wheels, a lot of grind wheels, when you’re grinding silicon carbide, it’s a very hard substrate, so we’re looking at engaging with customers on their consumables purchases and getting them to go with us. It’s going well.

What’s your most common product, what’s your core product?

From an equipment perspective, obviously we just bought the 6EZ to market, that’s still in the evaluation phase with a lot of our customers. That, I kind of look at separately. Our other product lines, we have the 7AF-HMG Grinder, a couple of customers that buy that tool at volume, it’s a great grinder and we sell a lot of those. Then we also have our 6DZ which is a silicon polisher, still sell a lot of those, we have around 300 out in the field across the world and that tool still sells very well. From an equipment perspective, that’s what we’re looking at. From other revenue, spare parts is currently our highest revenue stream, I think we may see that shift more towards consumables, but that’s kind of where the core of our revenue is derived from.

How much do you sell these polishers and grinders for?

I can’t give you exact prices. [Laughs] It ranges from the $750,000 to $1-million-dollar-mark for the grinders and then you’re looking at $2 million-dollars-plus for a polisher.

You talked about how you think you’ll be cash flow positive, when, this year or next year or…?

I’m not sure we’ll be cash flow positive this year, we’re pretty close to cash flow breakeven. What we’re seeing right now, is we’re having to build inventory. I’m sure a lot of people are aware of the pretty horrendous global supply chain shortages for raw materials, everything. So we’re building inventory in anticipation of what I think we will ship next year, there’s some outflows related to that. But hopefully into next year we will see cash flow positive.

Can you give us a sense of how much of your revenue is from sales of the big equipment and how much from consumables now? I’m just looking at your half-yearly, revenue was $4.6 million for the half to 4th of July. There couldn’t have been too many grinders and polishers sold in that, right? How much of that is from selling grinders and polishers and how much from selling the pads or whatever it is, consumables?

Our equipment sales in the first half of the year kind of tend to be softer than the second half, just related to our customers’ capital spend cycles. I can say for the year I’m expecting equipment to be 55 per cent of our revenue, with spares and other revenue coming in at about 44 per cent, which is an increase. FY20 other revenue was only 35 per cent of our total revenue, so the focus this year really has been on expanding those recurring revenue streams. But we will see more equipment shipments in the second half of the year.

What about the technical side of things, because you lost the CTO as well and had to appoint a new one, can you just take us through – because I imagine technology and science are pretty core to what you’re doing and that’s a pretty important position?

Yeah, absolutely. The previous CTO left to take another opportunity. Since then, have hired a new CTO, Dr Karey Holland, she has over 30 years’ experience in CMP, so the 6EZ silicon carbide polisher is right up her alley. I believe we have the right team in place now and we are expanding our engineering team, internally we have some open requisitions for that team. That position has been filled and that was a very important one to fill, I agree.

Firsthand Fund – so it’s an investment fund and they own 51 per cent. Is there an element in that of Firsthand coming in and sort of taking some control?

Firsthand actually own a little more than 51 per cent, some of it’s held on our US register. Kevin’s obviously been involved from the start of Revasum, so he was the obvious choice for us to appoint as chairman when Vivek decided to resign. He’s heavily involved.

It’s almost like Revasum’s a subsidiary of that fund in a way if they control it, I guess.

Somewhat.

Just give us a sense of how you see the near-term outlook for Revasum?

I think the near-term outlook is good, I think there’s a lot of opportunity out there. I think from the 6EZ perspective, we’re finally getting some traction out of key industry players, they’re accelerating their programs for silicon carbide so I’m really excited about where that tool is going. I’m excited by the level of demand we’re seeing across our product lines and I think the next couple of years are going to be pretty great.

Should investors think that maybe there’s a takeover possibility? I mean, Revasum’s a small company, it makes good products in an expanding industry. Is there a possibility that it gets taken over?

We have no intentions to do that or have a takeover, so no.