Itaconix Share Discussion Threads

[owenski] 18/4/2021 20:21

Yes, you're right, tiring day, I was actually using the wrong percentage profile. There are of course - as mentioned - a few variables to consider, but at a GM of 35%, and assuming a 3m admin charge, it's looking close to $9m for BE. On those figures @ $9m rev, they'd earn c150k profit.

[purchaseatthetop] 18/4/2021 17:45

It all depends on the level of Operational Gearing for ITX. OG is the balance of fixed and variable costs within their production process. JS has already said that gross margin will rise with increased use of the capacity of their production line due to the Operational Gearing.

So, it will be somewhere between $6m and $8m depending on a whole array of variables.

That itself does not matter. What matters is how rapidly revenue is rising to close the gap to BE and therefore reduce the monthly cash burn. ITX had a healthy cash position at 31/12/20 and we know that they had $1.1m of finished goods inventory ready at 31/12/20 for (a good percentage) Palmolive powerpacs and other pre-ordered sales. That is $1.75m of sales at a gross margin of 37% (rising slightly to reflect operational gearing). That is sales without even running the production line at all in 2021 for new and repeat non-Palmolive orders.

H1 2020 sales were $1.2m odd. The fact that ITX had 50% more than that pre-produced ready for 2021 tells you more than enough.

owneski....if sales are $6m and gross margin is say 35% the gross profit is $2.1m and therefore with $3m overhead that is a loss of $900k. Gross margin would have to be 50% with those sales and that is not going to happen.

[owenski] 18/4/2021 17:35

I wont claim any expertise, but using a percentage calc. for cost of sales relative to revenue - minus- admin (which I've factored at 3m to cater for extra hiring) I'm getting a profit at just under $6m Revenue.

The cost of sales is rising with the revenue, so I've worked out the percentage ratio as such rather than rely on a GPM. The admin costs appear to be fixed once the new hirings recently referred to are factored in.

Of course, I accept I could be missing something here.

[hydrus] 18/4/2021 17:07

I think the BE costs are optimistic. I'd be keen to see your workings. My calculations based on their gross profit margin of 35% and central costs of circa $3m (with new Execs factored in) suggests b/even around $8.5m. Either way what really matters is that if they get to $75m revenue then profits will likely be €20m plus.

[purchaseatthetop] 18/4/2021 17:03

lefrene....JS during the presentation addressed the issue of capacity and made clear that they are making decisions right now about their strategy. Either run the existing line 24/7 or add another line.

There are benefits and downsides to both. Using the present configuration is less capital cost and higher short term profitability but 24/7 operations also mean that repairs/maintenance and breakdowns become an issue.
Adding a production line costs more now but gives greater flexibility and it is easier to manage a company running non 24/7 shifts.

It is a wonderful problem for ITX management to have.

I am expecting $3.1m H1 2021 and then around $4.8m H2 2021 making $7.9m. That is more than breakeven and H1 2021 will be almost breakeven. If this is hit then the share price will be well into the 25p+ range (all IMO).

I love ITX for their technology, their management and leadership, the fact that their VP's and CFO are women, their IP fortress, their strategy and the fact that other shareholders spent the £90m+ getting the product ready for the right time (which is now and which is why Woodford was a genius but 4 years ahead of the right time).

[lefrene] 18/4/2021 16:48

"TX are a deliver not promise company", I think you just gave Neil Woodford indigestion! :¬) But I tend to agree, and I feel it's because their progress has become so rapid that they can afford to wait that bit longer with news because they know they are actually going to deliver, rather than most AiM stocks who only talk but don't walk.

Given the calibre of their major clients, if they should feel the need to expand capacity sooner than later, then I suspect the umbrella lenders will be forming a queue to throw money at them. If you're very busy with a high margin product then it makes sense to borrow, rather than try other the other usual options to raise capital.

[owenski] 18/4/2021 16:30

Thanks purchase, great answer on the capacity,

Surprised that B.E. is as high as $6.5m although I found it difficult to be precise as their cost of sales rises, obviously this isn't a fixed cost base/top line growth kinda model.

Are you expecting B.E. for this year?

[purchaseatthetop] 18/4/2021 16:24

Pugugly....you are miles behind on ITX revenue development. My calc show breakeven is around $6.5m per annum. My calcs show that H1 2021 should be around $3.1m (compared to H1 2020 $1.2m). I got H2 2020 spot on with the same spreadsheet which was miles above forecasts.

TX are a deliver not promise company and they have developed far faster than you realise. They are already at breakeven (JS stated in the presentation that they were having profitable months) and there will be no need IMO for a rights/placing.

owneski...they can get to $15m per annum on present capacity doing 24/7 operations. It costs another $500k to add another $7.5m per annum to the capacity. The Operations VP will now be working out if it is best to add a new production line now or later.

[pugugly] 18/4/2021 15:39

owenski - Good point but probably still some way off - When and how?
Debt or rights/placing and at what price?

[owenski] 18/4/2021 14:46

I gather this will need north of $4.5m for it to reach breakeven, taking into account they're making a few hirings recently???

And, they'll need to increase plant/processing capacity at some point to capitalise on growth opportunity?

[donaferentes] 18/4/2021 10:09

Good to know. Must have missed your arrival.

[pugugly] 18/4/2021 09:54

try this one and see if you can find link - may need to register -

[thefartingcommie] 18/4/2021 09:29

re..Next Wednesday, we are excited to have Itaconix (OTCQB: $ITXXF) joining us on our #OTCQB podcast.

do you have a link by any chance? tx

[parob] 18/4/2021 07:58

Will be listening!Next Wednesday, we are excited to have Itaconix (OTCQB: $ITXXF) joining us on our #OTCQB podcast. The company focuses on producing bio-based polymers from itaconic acid. Tune in to this quick snippet to hear CEO John Shaw explain how polymers work.

[purchaseatthetop] 17/4/2021 18:32

donaferentes...I bought ORPH at 40p. My heavies are AGL, ITX and ENET. Middle weighting ORPH, MCRO, NEX, SAGA, BMN, smaller STX, ARS, BCN

[donaferentes] 17/4/2021 18:13

did you never look at ORPH, patt? i would have thought right up your street. firing on all cylinders but not to late to treble your money in 12-18 months.

[thordon] 17/4/2021 14:13

Lot of profit taking yesterday , do not blame them.
But sets the new investors at this level

[thordon] 17/4/2021 14:12

Yes do agree that's the admin saved in last years accounts.

Another thought what if the Dish Washers tablets are the higher margin 60%
That would be icing on the cake

[thordon] 17/4/2021 14:04

pl360pet.com/product/dry-shampoo-powder-for-dogs/
pl360pet.com/product/odor-neutralizing-carpet-powder/
pl360pet.com/product/fabric-room-freshener/
pl360pet.com/product/odor-neutralizing-cat-litter-powder/

[purchaseatthetop] 17/4/2021 13:55

Thordon...I think that the decision to use Independent Chemical Corporation to distribute their product has helped allow many smaller companies to use ITX products:



The sign of a very well run company. Automate or eliminate. They want the sales (at higher margin to cover for IC distribution fees) but do not need the noise of lots of enquiries and trying to collect the money. The skill sets of ITX are technical.

[thordon] 17/4/2021 13:44

few more to check from LSE site

[...]
[...]
[...]
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the amount of products now is just exploding , when you look at last years products

[eeza] 17/4/2021 11:40

At this rate you may have to increase to 5 nights @ 1800hrs !!

[purchaseatthetop] 17/4/2021 11:13

Well, what a week. ITX, AGL and now ENET starting its journey.

My views on the next month:

Assuming that we do not have a Q1 trading update - I am more and more of the opinion that we will not have one. The first quarter would have been very high due to the release of the Palmolive powerpacs in Feb 21. The high level of finished good inventory on 31/12/20 indicates that maybe $1.5m of sales were cued to go out almost immediately. John Shaw knows how to manage expectations. The last thing he would want to do is release amazing Q1 figures and then have to release H1 2021 figures that showed a drop in sales Q1 to Q2. Not many investors would have done the digging to understand the reason for a drop in activity for the first time.

So, assuming that there will not be an update, I expect us to have a new base of around 8p+ and there will be some profit taking. I am going to be adding at these prices (basically as long as I can get more than 10,000 shares for £1,000) as the moment we get a new RNS we will be flying well above 12p IMO and my buying will be over. Then it is a cash cow.

As we know that the latest day possible for an new RNS is 19/7/21 ( for the H1 2021 trading update) that gives us around 13 weeks to add while ITX still remains a sort of secret.

H2 2020 sales were $2.2m. John Shaw said in the presentation that "there is a chance that H1 2021 will beat H2 2020". I repeat as I posted a couple of days ago, my calculations show that this is a bet that only he can win. I expect H1 2021 to exceed $3m. ITX is already at breakeven and if that is the case then this is already a £150m market cap company priced at £39m.

Have fun. Add if you can. Buy some ENET if you can. Look at AGL if you have the chance. They are my three largest shareholdings.

[the ghost who walks] 16/4/2021 18:11

It was clear from the results presentation that itx shares would have to move much higher.

[purchaseatthetop] 16/4/2021 17:04

matt123d...I wish you well in trading. I cannot trade as I would not be able to get my 1.6m shares back with certainty. Hold for gold with this share.