Well, the decline started right after the last quarter was announced, and the reason for the decline is in the balance sheet and income statement. In a nutshell, the new hires aren't quite paying for themselves yet. G&A has doubled because of the hires (new sales director & staff), and looks to remain fixed at $500K per quarter. Current asset/liability ratio less than one, particularly A/R vs. A/P. So no help there, either. Inventories are up some; though as a percentage of sales they are reasonable, in absolute terms they represent the albatross/salvation: These folks need to do some very tight cash management (have the production folks take a vacation, keep up the slow payment of creditors), and SELL machines fast and COLLECT fast (offer discount for fast payment) or they're out of cash in a few weeks. How much more money has Dr. Adlerstein got? Any financing would be a positive for the stock. Do they have an IR? Has anyone called? Maybe they should talk to KDUS. <g> They're a fiscal fit, even if the businesses are totally unrelated. The market is currently doubtful of the ability of biotool companies to sell instruments for a while, after ABI and MDCC both cratered during this period. I think that worry is being applied to SMDX, and taken with its difficult fiscal position, accounts for the sell-off pretty rationally.
Cheers, Tuck |
