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Biotech / Medical : Colorado MEDtech, CMED
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To: PaddyD who wrote (114)7/14/1998 3:43:00 PM
From: Edward Larkin  Read Replies (2) of 288
 
cmed held a conference call with analysts last thursday, July 9th. The topic of discussion was to cover the impact of the Genprobe $20 million contract on the DNA diagnostic probe to be used in the blood banking industry. Management indicated that most of the revenue recognition would ocurr in 1999 and 2000, which is a better spin on the news than was painted in the press release.

Atanasoff did cover the y2k stuff briefly. They are presently still in the evaluation phase of this opportunity, this includes review3 of various types of widely used diagnostic equipment in hospitals to determine which have y2k bugs and which do not. It appears they have a commitment from Vencor (et al) which will cover any costs they have associated with the start up of the program.

Any significant revenue recognition on this probably won't ocurr until mid winter and the company indicates that the extent of revenue recognition in fiscal 1999 (June) is not quite yet predictable.

The company continues to pursue potentially significant acquisitions, but does not appear ready to announce anything as of yet. We believe that they won't announce a deal until it is closed (not a letter of intent) consistent with what they did on Erbtec last year.

I do not believe any analysts are factoring in y2k revenues or earnings into their forecasts as of now. This would include Scott at Meyerson, Wing at Raf and Curtis at Spencer Edwards. Estimates for fiscal 1999 appear to be at a concensus number of 50 cents so the stock appears to be trading at only about 17X the current fiscal year's eps. In many of the analysts opinions the stock should carry a 25-30X multiple.



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