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Technology Stocks : Neoforma.com, Inc. (NEOF) -- Ignore unavailable to you. Want to Upgrade?

To: Daniel Schumacher who wrote (33)	7/21/2001 12:48:40 AM
From: Tom Pulley	Read Replies (3) \| Respond to of 41

Daniel, looks like there's not much interest in Neof as you were the only person to post this year. Maybe their quarterly results will stir up some interest. It looks good to me and may be a good sign not many are following the company. I just listened to the conference call so I'll do my best to summarize it for anyone interested. Management was clearly pleased with the results of the quarter and are on track with their guidance of over a year ago for profitability in the first quarter of 2002. Revenues increased 71% sequentially to $4.1 million, expenses were actually reduced by 12% sequentially, cash operating loss went from $16.4 million to $12.5 million. The results were 20% better than analysts estimates. It was repeated many times that they are comfortable with projections for profit in the first quarter and they provided an estimate of $1 million operating profit in the first quarter. Questions from the analysts seemed to indicate they believed it was possible for profitability to come as early as the fourth quarter, and management indicated they were aiming to get to profitability as early as possible and hopefully very early in the first quarter of 2002. Revenues are projected to be $8.5M in the 3rd quarter of 2001, and $13.5M in the 4th quarter. For full year 2002, revenues are expected to be $80M and operating income is projected to be 10M. The assumptions in the above projections are connections of new hospitals at the rate of 75/quarter. I believe I understood that they assume each hospital purchases 50% of its supplies 6 calendar quarters following connection. Large suppliers added to the system during the quarter were Mckessons and Abbott. 500 hospitals currently under contract have purchases of over $10 billion annually and are under contract to use NEOF for 50% or more of their purchases ultimately. 250 of these hospitals were connected at quarter end and I believe it was implied that 30 or 40 were connected in just the last few weeks of the quarter. Revenue is over 2% of transactions currently, but will trend toward 1% as total transactions trend toward $15 billion. It was indicated that revenues could be very significant over time from "Premium services". Neof is developing their own premium services and also has teamed up with I2 Technologies on SRM and CRM solutions. Premium solutions would be primarily web hosted solutions and they mentioned two called Order Manager and Report Manager. The business model was likened to cable TV......Neof's purchase and supply system being the base cable connection, and Neof's premium solutions being premium channels and pay per view. The first of the premium solutions should be rolling out over the next two quarters. (Personally, if the business model is as effective as my cable company and the hospitals are like my house, Neof should do great. I think our cable bill averages twice the base rate) As far as competition, management said they are aware of 3 companies in their general business now versus 100 one year ago. Of the three, they were partnering with one, one was focused on connecting suppliers to distributors; so the main competition was a company called GHX which was called a fierce competitor. That's about it for the conference call. For anyone reading this, one big positive in my view for this company is there has been some insider buying in the last couple months and no insider selling. Tom