Clues:Always watch the choice of words!
CZO's inventories:
Looking at the inventory at the end of 2022 it was $3.757 million vs. $2.324 million last year. That is a stunning 61.67% increase in inventory vs. the previous year and a new record for inventory build ahead of the coming fiscal year. Gilles had commented that CZO had produced enough avenanthramide for 2023 and going into 2024. It was a production achievement he was very proud of. It may be that the new deal with Symrise signed last year provides for confidence in producing a larger production run to gain production and shipping efficiencies. This could support a large revenue surge of high margin avenanthramide in Q1 and Q2.
If quarterly revenue distributes as it did pre-COVID in 2019 with the normalization of supply chains there could be a different pattern.
If annual revenue increases 10% in 2023 vs. 2022 annual revenue for 2023 will total $20.724 million. If Q1 2023 revenue distributes as it did in Q1 2019 24.8% of annual revenue will be in Q1 2023. Q1 2023 revenue would be $5.14 million vs. $6.17 million in Q1 2022 and CZO could still be on track for 10% annual growth in 2023.
Beyond the above higher quality grain leading to margin efficiencies was used up in 2022. There is also significant capital spending planned in 2023 for the clinical trial, avenanthramide scale-up for oat flour, and PGX scale-up which could hit the bottom line.