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Biotech / Medical : SMDX Spectrumedix -- Ignore unavailable to you. Want to Upgrade?

To: GARY P GROBBEL who wrote (26)	4/12/2001 1:06:16 PM
From: tuck	Respond to of 34

Well, the decline started right after the last quarter was announced, and the reason for the decline is in the balance sheet and income statement. In a nutshell, the new hires aren't quite paying for themselves yet. G&A has doubled because of the hires (new sales director & staff), and looks to remain fixed at $500K per quarter. Current asset/liability ratio less than one, particularly A/R vs. A/P. So no help there, either. Inventories are up some; though as a percentage of sales they are reasonable, in absolute terms they represent the albatross/salvation: These folks need to do some very tight cash management (have the production folks take a vacation, keep up the slow payment of creditors), and SELL machines fast and COLLECT fast (offer discount for fast payment) or they're out of cash in a few weeks. How much more money has Dr. Adlerstein got? Any financing would be a positive for the stock. Do they have an IR? Has anyone called? Maybe they should talk to KDUS. <g> They're a fiscal fit, even if the businesses are totally unrelated. The market is currently doubtful of the ability of biotool companies to sell instruments for a while, after ABI and MDCC both cratered during this period. I think that worry is being applied to SMDX, and taken with its difficult fiscal position, accounts for the sell-off pretty rationally. Cheers, Tuck