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Biotech / Medical : Trickle Portfolio -- Ignore unavailable to you. Want to Upgrade?

To: tuck who wrote (761)	7/26/2001 1:08:06 PM
From: tuck	Read Replies (1) \| Respond to of 1784

My notes on MDCC results . . . Hit numbers of .15/share. EPS growth seen to be 15% YoY. Consumables (reagents) growth continues unabated @ ~45%; sales stand at 13% of revenue. Indeed, ABI mentioned strong consumables sales this morning, and other consumables stocks are up a bit in sympathy. I continue to like QGENF here. IVGN reports later today, and that should provide further visibility to my contention that consumables haven't suffered nearly as much as hardware. Europe accounts for 22% of sales, and that was the weakest geographical segment. FX contributed to a bit of margin weakness. This is seen as easing a bit. Japan is going better than expected considering the state of the economy there. Segments outside of Europe and U.S. account for only 7% of revenue, however. LJL digestion mostly complete. Reps retrained by mid 2Q helped their results versus Q1, but MDCC still a bit disappointed with performance there. Their results are usually back-end loaded, but delayed orders from Q1 filled in early Q2, smoothing it. Munches of Cytion and Essen expected to crimp operating margins some for one quarter because of increased R&D associated with them. MDCC seems to be executing well in terms of holding costs in line despite the above. SG&A expected to be flat as % of revenue, and GMs steady in the low 60% range. One bright spot is that DSOs have come down from 101 to 92 days. Another, vaguer one, is that the order rate is much better than in Q1. Cash flow remains in the mid $3 million range. Also executing ahead of plan regarding product development and launches, a number of which will be made at the SBS (I believe that's the Society for Biomolecular Screening) meeting in September. Again, these are mostly reagents for FLIPR stations, now enjoying an installed base of over 200 units. Noted 79% of revenues come from products launched in the last three years. They see $300 - $500 million market opportunity in electrophysiology market (Cytion $ Essen) Sees the competitive landscape changed, but a wash. To whit, PKI + PBSC is now a stronger competitor, though they see no pricing pressure as a result. OTOH, VRTX munch of ABSC is seen as removing a competitor from the field. They would not offer quidance for '02, but said they sense that Qs 2 & 3 would appear to be bottoms. Looking for 61 to 65 cents for '01. Revenues $99 to $103 million. Analysts currently going with the bottom of those ranges. WAT said much the same thing about this period being a bottom, and my impression is that MDCC is executing well and in a good position for the upturn in capital equipment for the life sciences industry. There are a few early indications that this is turning around. I think MDCC may be a good buy here, but will likely not take off until the winter, because of the expected return to the usual back end loading of the quarters. Next up: WAT. Cheers, Tuck