Don,
Talked to Eli Schick this afternoon, as I was not able to obtain any useful information on the net about the company. He made several points:
1) Margins for last Q were about 52%, actually about 54% except they wrote down some inventory. They expect to hit 60% at some point.
2) Last two Q showed first profits (small ones!), revenues growing but forgot to ask the actual numbers.
3) They have filed for FDA approval for bone density measurements; should get by year-end, but possibly much sooner. Total current market potential for this is about $2 billion
4) HMOs are now allowed to do the procedure ($40 per), so the market is now available (was this a Medicare thing??)
5) Regam, a French company, is major competitor, however . . . .
6) SCHK has about 85-90% of US mkt and 50% of French, and growing, and SCHK system is more flexible and cheaper
7) only about 2% of the dentistry market (175K dentists in US alone) has been penetrated to date, enormous room for growth; a poll of dentists indicated that about 49% would like to implement the system
8) unfortunately, there are little to no followup sales; so SCHK sells a razor which does not require any blades (might not permit a very steady revenue stream).
I did not inquire about manufacturing of the sensors, so do not know if they outsource. My impression is that they are the software end of the equation. If you have any additional insight, post it to me. I took a tiny position today after the big runup, but will get in deeper if the stock settles out later on.
Good investing,
Jim
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