Mark - thanks for your thoughts, which seem quite reasonable. My concern is that this is a very low tech item, easily produced. While there may be a delay in FDA approval for a competitor, there may not be because it is not a new product (I'm not aware that the FDA supervises the production process of relative comodity items such as sutures (maybe it does). I also noticed that parts of the products are subcontraced to others, thus increasing cost of production, Possibly there are savings by producing in Mexico, but volume is low compated to Lukens' large competitors, increasing production cost. There may be benefits by targeting foreign markets, as you say. As to the funding of growth through selling of warrants, the problem is that they are sold for less than market value, thus the accession of capital is for less than market value. It does gain goodwill and loyalty of key individuals, and that has value.
Maybe you're right, but I would worry about a low tech item with bery strong competition and no brand-name value. The financials are strong, though. Thanks for your other suggestion - I'll check it out. |
