Adding to the information below, quarterly still not out, so expecting Monday morning before open.
The CEO, Rebecca Shooter-Dodd, unexpectedly resigned back on 23rd May. No further information was given, other than for personal reasons. Revasum got the almost mandatory SP wobbles as a result, but there has been no change to the companies forward estimates.
The new CEO has been appointed, Scott Jewler, who seems like an industry heavyweight and is well suited to the role. His tenure starts next week, 2nd August.
Added to this, Revasum would seem incredibly well positioned to benefit from the CHIPS funding initiative that has now passed. All their US based customers should benefit in terms of funding to facilitate increased growth and bringing plans for new foundries forward. It could be that Revasum also benefits directly from CHIPS, both in subsidising COGS to lower their pricing and gain competitive advantage, and in facilitating increasing production capacity to meet increasing demand.
The quarterly should reveal more on Monday.
Revasum manufactures tools for use in foundries in the semiconductor device manufacturing process. Revasum's portfolio includes grinding, polishing and CMP equipment used to manufacture substrates, with a particular focus , and a world leader, in SiC Single-Wafer processing equipment, 200mm and below. The company has over 70 years experience and 80+ patents. Silicon Carbide ( SiC ) is the fastest growing semiconductor sector, the substrate offering significant advantages in EVs & 5G applications. SiC delivers an estimated 20% increase in battery range compared to Si. They manufacture the tools in the CA, USA , and are well placed to take advantage of the Biden led push to onshore foundries in the USA.
Revasum flagship tools are the 7AF-HMG Grinder & 6EZ Polisher designed specifically for SiC processing with market leading process results achieved using both platforms. Both tools accommodate 150mm and 200mm wafers. This year the tools have been delpoyed and become production-proven technology, The company recently announced a program to develop the next generation 6EZ SiC CMP tool with additional features to optimize performance in high volume manufacturing environments.
The management team went through some upheaval 18 months ago, but the new team has settled in very well. The new CEO, Rebecca Shooter-Dodd has demonstrated strong discipline in reducing costs and shaping the financial structure of the business. Kevin Landis, from Firsthand Technology Value Fund, Inc, is the Chairman and they are the major shareholders with ~70M of the 105M SOI.
Rebecca again confirmed guidance last week of CY sales of USD $25M to $35M, a 80% - 155% YOY increase. There has been a concerted effort to move the revenue mix towards recurring revenue - spare parts, consumables & services - which now represents 45%. This mix change, combined with strong cost discipline & an ability to demand price increases has seen margin increase to 35%, in line with industry standards.
They secured a USD $8.0M growth capital facility last quarter and have employed the services of 2 co-manufactures, also located in California, to increase output to meet demand.
Despite all this, free cash flow was -$4.4M for the last quarter. This was as a direct result of inventory build in raw materials to ensure ability to supply completed tools, and the delay of shipping a major tool ( due to o/s freight issues ). My expectation is that the business will generate about $10-15m in gross margin in CY22, and given total operating costs are lower than that, deliver positive cashflow and accounting profit for FY22, and huge milestone for the business.
So in summary :
Revasum will deliver $10-15m US gross margin on $35m US revenue at 100% growth rate, commercialising industry leading tech in the fastest sector of the semiconductor industry which supports EV,5G and many other things.
Even in times like these I expect Revasum to rerate accordingly at some point in 2022.
