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Biotech / Medical : The Stock for 1999(Polymedica)PLMD(Medical Supply Co.)
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To: Arthur Radley who wrote (1448)7/21/1998 12:56:00 AM
From: Dennis C  Read Replies (2) of 3414
 
Greg: you forget to post DB's msg on Yahoo.

DB1300

Greg -

Okay - had a chance to read throught the report, this is what I found interesting:

1 - Without question, the filing of the report this early. I can't think of another instance where a company has not announced earnings before filing the 10-Q. What makes this even more interesting is that they filed the 10-Q so fast. What this would lead me to believe is that there may be more news coming in the next 25 days or so which would have affected the filing of this 10-Q, and therefore they felt a sense of urgency to file it.
Rumors that were stated before get more credibility when something like this happens.

2 - Back to the actual report - accounts receivable allowance of $5,428,000 represents
24% of total accounts receivable. Aren't most of their receivables from the government? The company states "Final determination of reimbursements are subject to audit by medicare. Medicare audits of the Company to date have not resulted in any significant adjustments ......." So, the obvious question .. why have a $5.4 million reserve for receivables primarily from the government?? Also, the reserve was increased $1.5 million during the past three months.

Conclusion: Either there receivables and accounting is a mess or they are being extremely conservative and are "saving for a rainy day". More likely the second scenario. From an accounting point of view, the more reserves the better.

3 - The $1.6 million from IT will be nice - it will be below the line as one time earnings so should not be part of any PE calculations, but it will add cash, and therefore either add interest income or reduce some interest expense.

4 - Diabetes supplies sales increased at a rate of 88.7%, and have higher margins than the companies other business segments.

Okay, my girlfriend is giving me some look right now so I better stop. Looking forward to your comments, post on SI if you get a chance.
ÿ
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