AYSI results out today

I am hoping they will issue a PR because the results were stellar. EPS over .04 a share and more if you count the currency translation gain.

Margins were up well over 50% which is a nice suprise. In addition they spent 350k on property plant and equipment in Q4. There has been some speculation for several months that they would start a second line. This has been on the drawing board for AYSI for awhile.

The unusually large expenditure on equipment may very well be for that second line. I would in fact suggest it probably is.

A second line ups their theoretical capacity to probably over 8 million a quarter from under 4 right now. Given their high margin levels alot of that would flow to the bottom line. With revenues up almost 300% year over year and mining in australia continuing to boom I believe it deserves a forward PE of 20. That puts fair value to me around 3.00 a share right now which means it remains a good value in the current price range.

I am not sure if there will be a reaction tomorrow. For long time holders who are astute enough to bother to read the filings these results were tipped in the NT-10k. For anyone not astute enough to do that I am going to assume they are not going to bother to do the math to figure out what Q4 earnings were.

If they decide to issue a PR that could of course change the dynamic.

In the meantime I am happy to hold for Q1 which is only about 4 weeks away and should show continued improvement over Q4. I am figuring on about .06/share for Q1.