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Biotech / Medical : VVUS: VIVUS INC. (NASDAQ)
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To: blankmind who wrote (4192)1/3/1998 5:39:00 PM
From: Musa Goksel Bulat  Read Replies (2) of 23519
 
Blankmind and all,

I keep reading CC, they always talked about production shortfall not decrease in sales for Q4. I believe production shortfall will not result in 25% decrease in sales since they had enough inventory to compansate for the shortfall. I made some calculations to figure out their quarterly productions and it looks like they were very well prepared for the 25% production reduction.

End inv dec31 96 $4540
end inv SALES CGS MANUFACTURED
Q1 4666 27791 8066 8192
Q2 5180 33458 9584 10098
Q3 6212 39118 11270 12302

THEY SAID THAT PRODUCTION WILL BE 25% BELOW Q3, WHICH IS 9226.5
Goods available for sale in Q4 will be 6212 + 9226.5= 15438 . I believe ending inventory for Q4 will be low.
Also they said that slow down occured in november and december. If they worked at the same rate as september during october they should have produced at least 4100 in october. Just beginning inventory and october production will make 10312 which is equivalant to sales of over $35million.(GP of 71%)

If someone looks at the production increase rate, he will see that quarter to quarter it went up around 20%. This means that manegement was very well prepared for the maintanence, they build up the inventory beforehand.

According to first call q4 estimate is .18, if my calculatians are correct they can easily make .28.

Any comments.

Musa
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