The Q2 ’22 report was disappointing. I was actually thinking I might have to consider selling at a big loss. The main issue I saw the disappointing utilization rate of the digital can printer at 30%. Also the other issue was the cash burn and selling of access inventory to raise cash.
In the conference call the CEO talked about the challenges and learning how to use the printer. They made some changes and the results would follow. I had to wait and see if those results would come, so I decided not to sell my EAST position.
The company recently put out an update on digital can printing. The signs are really encouraging. The company reached a 2M digital cans printed milestone in August ’22.
We know the following run rate:
Q2 ’22 – 750k cans printed
July ’22 – 650k cans printed
Aug ’22 – 600k cans printed (2M – 750k – 650k)
We don’t know when the 2M cans printed milestone was achieved. I don’t think it was at the end of August. I would think based on the run-rate it was early of mid August.
The company now has 2 shifts working at the can production site. The company is still hiring for the 3rd shift. The staffing has been a challenge for the company. Now that 2 shifts are on-boarded we are seeing these numbers improve. I would expect September to be even better. If the 3rd shift is hired and working by end of September then I would think we will be in for an excellent Q4.
Now we have to wait on the gross margin numbers and how the cash burn is looking. It will take a few months before the quarterly numbers are reported. I’m excited and eager to see the progress.