Seeking Alpha
View as an RSS Feed

Kevin Quon  

View Kevin Quon's Comments BY TICKER:
Latest comments  |  Highest rated
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    just read the instructions,

    Were it not for the fact that it was just a few days before the earnings conference call, I actually had much to say about this.

    I would even argue that the BASF deal is one of the most important deals we've snagged yet, second maybe only to Unilever. The deal gives us the first foot into a very heavy doorway. Chemicals were always going to be our bread and butter as they are the ideal balance between volume and value. The wide range of what BASF offers gives a very wide spectrum of opportunities to offer non-petroleum based alternatives to their existing product lines. This was the top-tier customer that we could have bagged, and it remains very exciting that they were willing to create a product line entirely around our oils. Further confirmation of its profitability via Painter on the CC is also encouraging when eyeballing where we stand in the ballpark in terms of the production-cost expectations.

    Kevin
    Aug 5, 2015. 11:12 PM | 4 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    Hi Dave,

    If you're talking about Moema, I believe that this will very much be the case as it'll likely take a few quarters and they'll need to show investors what is being done. Of course I'm talking about on a earnings call basis. I wouldn't count on regular updates between now and the next CC. A few new pr's in between might occur though, but likely not production related.

    Best,
    Kevin
    Aug 5, 2015. 11:02 PM | 1 Like Like |Link to Comment
  • Flotek Rises On The Growing Success Of Its Energy Chemistry Segment [View article]
    Sure. I rather not dispute claims. If anyone wants to believe in the short thesis he provides, it's their right to do so. Nothing stuck out as overwhelmingly alarming to me given that purchasing doesn't have to be uniformly spread over the year and a few majors tend to dictate the majority of the market share. To each their own. I respect Pearson's research capabilities, but I've also seen him write much more clear-cut cases in the past. This didn't really seem like one to me, but that's just my two cents.
    Aug 4, 2015. 02:14 AM | Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    I agree, and I would've liked to have seen consolidation months ago if it was up to me.
    Aug 3, 2015. 10:30 PM | 1 Like Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    just read the instructions,

    Managements been pretty clear that their margins for higher volume product lines (tailored oils) are not positive at Clinton, and to get them to be positive would require additional scaling costs. And as is the case with most product lines, ramping product doesn't translate in immediately returned cash. A/R typically takes a quarter to turn around too so you're really just burning cash at an accelerated rate instead of patiently fixing one problem at a time at a slower cash burn. In the mean time, Clinton is being used sparingly w/ product lines that are profitable at this scale (ie those that don't require much downstream processing or for backup purposes) in order to divert the most amount of capital towards ramping moema. These lower volume & higher margin product lines are still developing their markets and will naturally require a longer timeframe to become meaningful anyways (ie. algavia/encapso).

    Kevin
    Aug 3, 2015. 10:11 PM | 5 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    "Foreseeable future" just means no defined time line as was consistent with prior guidance on the issue, despite a stated belief it would happen next year. Nothing suggests it won't either nor does it matter since the profitability will still flow over to szym regardless of consolidation. It merely depends on when szym gains more control over moema's daily operations.

    If you want to believe it means more than that, it's your perogatve to do so, but this is my brief reply on what I see as a non issue personally.
    Aug 3, 2015. 08:19 PM | 3 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    rrosthal,

    The 10-Q always has some JV figures in it, although they've been crap of course over the last few quarters. Last quarter was practically nothing because of the planned shutdown (which is seasonal) of course. Progress @ Moema should be the key thing to monitor going forward, however.

    Kevin
    Aug 2, 2015. 01:01 PM | 1 Like Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    GreenTechWatcher,

    When the JV profits, the profit will flow over to the bottom line for Solazyme. Just as the company is incurring a loss in equity now due to its losses. The bottom line is still accounted for on the reported earnings. Just not the top line revenue unless one digs into the 10-Q's.

    Kevin
    Aug 2, 2015. 12:59 PM | 1 Like Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    richard freeman,

    The fuels market remains a very large ubiquitous market that is very easy to get into and dump a large amount of volume but for a very low amount of value. It is a very useful part of our future. Maintaining a foothold allows the company the ability to not have to re-develop the market should they leave it. It maintains the networked connections and continues to validate the product for a disbelieving clintele base.

    I think Wolfson was pretty clear how small this is for us now (even if he wanted to also not diminish the UPS announcement altogether now that the cat was out of the bag). It's probably just a single batch in my opinion, but it was also the original mission for Moema.

    Kevin
    Aug 2, 2015. 12:56 PM | 3 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    acmeblue,

    For what it is worth, they are contracting out much of the manufacturing for Algenist.

    Kevin
    Aug 2, 2015. 12:49 PM | 2 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    Realistic4u,

    They are selling oils to Natura which is incorporating them into their product formulations. These sales will likely be part of the revenues reflected in the joint venture's revenue and will not be reflected on Solazyme's financials until Moema is consolidated onto the company's financials.

    All eyes should be on the joint venture's performance for the next few quarters, which can be confusing as most investors tend to only care if a company exceeds or misses on their earnings results (which will exclude Moema's performance). While these results do still hold some relevance towards the direction of the company, it's only half the story at this point... and to be quite honest, the more insignificant half at best. News of what is going on at Moema should be what is important.

    Kevin
    Aug 1, 2015. 09:38 PM | 3 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    Glad to see they are resharing Solazyme's promo vid. :)
    Aug 1, 2015. 07:01 PM | 3 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    abigchocoholic,

    I think it's speculative to believe what you suggest, but it is your right to do so all the same. I do not know anything outside of the broad categorizations of the SEC filings where those expenses are going. But as large amounts as those expenses might seem to people like you & me, they really seem quite normal to what we're seeing around the industry. I do believe the san-fran location may have not been the best starting location given the high competitive nature of the salaries & cost of doing business.... but one could also argue that the talent obtained from doing so was just as indispensable to get us where we are today.

    As I partially wrote about in my article above it's not the best comparison to relate the revenues with the expenses incurred when one takes into consideration the context of all that has already transpired. Clinton is still incurring fixed costs, for example, despite being run at a minimum in order to focus on Moema (which is 100k MT nameplate btw). High initial ramp up costs for optimization restrains the company from pursuing both at the same time, but it also leaves the company looking stupid for generating so little revenue for the expenses incurred. Did the company overexpand its capacity? In retrospect it's clearly the case (not necessarily for lack of demand, but for an overconfidence in getting the Brazilian operations working in an adequate timeframe). The oil market crash has also been nothing short of ironic, and anyone who said they predicted the Saudi's actions would just be a liar. All the same, this is the reality we now face and it is the one the company continues to challenge with what seems like a more-than-fair strategy to me.

    I vehemently disagree with the dismissal of Algenist, however. Especially considering the the majority of our profitable revenue is derived from this one cosmetic line. The brand is already a success and any additional gains are but a slow realization of that prosperity. Could the company offload it to another major in order to cut down on expenses & focus entirely on it's other important divisions? For sure, and no doubt the company knows this to be an option. But for them to not have done so yet speaks much more about their confidence in their ability to turn things around than it is mismanagement imo. No one cuts down the milking cow for stew until they're desperate enough to believe they can find a better return in the meat. We're just not there yet, and hopefully will not have to come to that - even if it would provide much short-term relief.

    Encapso is much bigger than I think you realize it to be. Drilling will continue, albeit it at a reduced rate and there is much room to gaining traction even in this reduced environment. Right now it's easy for drilling companies to delay projects, but it doesn't take many wells for this division to still provide a meaningful impact to the bottom line. Is the oil slowdown about to get worse? Maybe, but can Encapso/Flocapso still be a growth business for Solazyme even still? Absolutely. Gradually replacing many oil-based drilling fluids internationally can also be a huge catalyst long-term. Even the Saudis will want that.

    Kevin
    Aug 1, 2015. 06:49 PM | 8 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    I definitely sit in the same boat as you in regards to long-term oil prices. Demand is growing and oil companies will need to innovate in order to thrive. Whether that innovation comes in the form of more effective drilling/completion techniques or in alternative (& more environmentally sound [refer to what's going on w/ coal stocks]) sources of energy, who knows. But that innovation will be necessary to stay competitive.
    Aug 1, 2015. 06:19 PM | 1 Like Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    mikestesla,

    Maybe the case, but I wrote this article on Thursday before those algorithms would've had any ability to affect what I was looking at and was basing what I wrote on with the data from the after-hours market session. The article was only approved on Friday morning on July 31.

    I know you credit me with not taking the oil industry correlation to SZYM more seriously, but let me reassure you I am more mindful of the direct impact it has than my lack of dwelling on it about it may have suggested.

    Apart from from mere associations from investors like you or me, there is a consistent pull from the institutional owners who model their holdings on the basis of particular indexes. Given that Solazyme is inevitably associated w/ multiple clean energy indexes, one would expect the company to both benefit and be hurt on the relation of how the oil & gas sector trades as these institutional investors adjust their portfolios accordingly with a broad brush.

    Kevin
    Aug 1, 2015. 04:39 PM | 3 Likes Like |Link to Comment
COMMENTS STATS
1,356 Comments
2,162 Likes