Discussion with Clint Severson CEO (408) 745-6862
In point (and disjointed) form from Monday May 18 and in no apparent order are answers to interested shareholders and investors taken from questions posted at SI and Yahoo.
JACKSON HOLE
The company has been engaged to communicate with investors and shareholders who understand the company and its prospects. It is not a company that will hype or spin the stock to unsophisticated investors. They can also assist in raising money when necessary, though nothing is imminent at this time with over 5 million in cash. Abaxis has no interest in hyping the stock and prefers to spend the money in marketing, R&D, and manufacturing.
NEW PRODUCTS
There are no new products (such as devices) other than expanding the disc menus and adding electrolytes and lipids.
The electrolyte development went thru a manufacturing run a week ago and will go into clinical trials now which should take about 3 months after which an FDA submission will be done. Approval from FDA might take 2-3 months.
AUTOMATED LINE
the new line is estimated to be operational in the 4th quarter of this fiscal year (Jan-Mar)
Rotor Bases: The first cavity mold for the rotor bases has been fulfilled capacity demand for the last 3 years. It runs 7 days/wk and 24 hrs a day (I believe). A 2nd mold is now running and will fulfill demand in 3 months! Mold#3 is expected to be operational in 5 months.
CLIA WAIVER
Management does not feel this is a priority as the opportunities for Abaxis lie in the non-CLIA market unlike Cholestec which depends entirely upon it. The CLIA waiver process is not a scientific one and seems more political-the company will need to hire an attorney with gov't experience to pursue. The company has not given up on this but feels it is not necessary as the Vet market will give Abaxis all it can handle. There are around 30,000 vet sites and Abaxis is in 1,200. That is about 4% of the market and Clint didn't shirk when he said he wants to get all of it. As the older technologies give way the Vetscan should absorb the new demand.
UNIT DISTRIBUTION
Last year 1,086 units were shipped; 632 US and 454 International. Of the 632 US, 149 were PICCOLO and 183 VETSCAN. Of the 454 Int'l, 63 were PICCOLO and 391 were VETSCAN
Last Quarter 274 units were shipped (167 US & 107 Int'l)
MILITARY
2 people are working with the Army on a field evaluation. Navy sales are expected to continue and are eagerly awaiting expanded menu with electrolytes.
INSIDER BUYING
CEO bought 10,000 last quarter and 4000, so far, this month.
WEBSITE
Within 6 months; they have a proposal with a company to run the website.
QUALITY CONTROL
Product failures have improved dramatically from 6.6% in June 1996 (when Severson came) to 1.6% in June 1998. The machine automatically records any aborted discs, they are replaced expeditiously by the company. Product design indicated a theoretical failure rate of 2% and the monthly records show that may be on the conservative side as they have been below that more recently.
2nd SHIFT
The company is looking at a 2nd shift but are being cautious as a whole new shift must be able to absorb the additional costs immediately. The company produced 468,545 rotors last year. When they get up to 30- 40 million they would look to manufacturing outside the US
ORBOS TECHNOLOGY
Two companies, a pharmaceutical and a diagnostic, are negotiating for use of the ORBOS.
MACHINE SERVICE
The machines are operating well under all conditions, servicing is not an issue
COMPETITION
The Analyst design is 20 year old technology. The IDEXX unit is a "slide show" unit. I didn't speak much with him about this but he did say he feels there is no real direct competition fro what Abaxis can offer.
I hope I have remembered to ask all the questions that were posted. Mr Severson said he would welcome any calls from those that might need more or better information. (408) 745-6862
Dan Byrne |
