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Biotech / Medical : ACMI - Accumed Inc.
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To: Cisco who wrote (884)1/4/1998 4:17:00 PM
From: aatkinson  Read Replies (1) of 1894
 
I have no reason to disbelieve the company, but I was unaware that there was a projection by the company of their absolute or upper-limit expenses.

I tend to think of gross margins (especially when compared to others in the industry) as a measure of pricing strength or low-cost manufacturing. I don't think oF Accumed as a leader in either category.

I'm looking for increased "revenues" or sales of the AcCell/TracCell system as a primary indicator of success, but I can see your point regarding the scaling efficiency on manufacturing costs -- and therein a reduced gross margin. In the near term, I would take revenue increases over cost improvement however.

In order to increase the sales of their system, the marketing and distribution costs could offset some of the other projected operating expense reductions. I didn't think they were doing such as bang up job in this area in the past, and should invest more in marketing and sales. We'll see.

I would also like to see some increase in free cash flow -- I'd be more confident that the company is not living form hand to mouth, and needs to borrow in order to operate.

I don't think that you have misinterpreted the company's statements; I'm more concerned that their projections are accurate. If their past internal "earnings" projections and break-even points have mimicked their analysts, and are as accurate as they have been in the past, we could have a problem.

Overall, I think your assessment is sound, especially for the long haul.
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