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

To: Madpinto who wrote (307)	5/19/1998 2:35:00 PM
From: Beltropolis Boy	Respond to of 828

the 10-q is now available -- released last fri (may 15). some random musings i've noted (quarter over previous year quarter): --net profit margins up to 24.98% vs. 20.62% --gross profits increased 51.1% from $18.4M to $27.8M --return on equity up to 9.64% vs. 7.53% --number of diluted shares up 1.7M for an eps dilution of $.03 vs. $.01 quarter over quarter: --inventories (raw materials, work in process and finished goods) up significantly: $21.2M to $26.5M "Research and development expenses increased 193.8%....As a percentage of net sales, these expenses increased from 1.5% for the three months ended March 31, 1997 to 3.4% for the three months ended March 31, 1998. The increase in research and development expenses as a percentage of net sales is primarily attributed to increased costs associated with research related to the Company's outstanding product liability claims." "Company also plans to construct a second manufacturing facility to be located in southern Thailand that is expected to produce latex and synthetic surgical, high-technology and scientific and examination gloves. Construction of this site began in the second half of 1997....Four production buildings are expected to be constructed on this site. One of these buildings will house the expansion of the Company's Tactylon(R) synthetic examination and surgical glove and the Company's nitrile glove production and is scheduled to be completed during the second half of 1998. The first machine in this building is expected to increase by over 200% the production capacity of the Tactylon(R) product line in comparison to the existing facility which is located in Vista, California. The second building will be constructed to provide additional capacity for the production of the Company's surgical and clean-room glove products. Production is scheduled to begin in the fourth quarter of 1998." "An additional two buildings will be constructed to house the Company's increased capacity for latex examination, scientific, synthetic and surgical gloves. Production is scheduled to begin in 1999. The new buildings, machines and supporting infrastructure are expected to cost approximately $80 million in the aggregate. The significant investment by the Company in its manufacturing operations is expected to increase the Company's annualized production capacity from approximately 3.5 billion gloves to approximately 5.5 billion gloves. Financing for the total capital expenditures for the two-year period is projected to come from internally generated funds, with any shortfalls to be financed through borrowings from the existing credit facilities." "The significant devaluation in both the Thailand and Malaysian currencies has resulted in an increased amount of foreign currency transaction net gains, which are included in other income, and an increased amount of foreign currency translation adjustments, which are recorded as a separate component of equity....The Company has not experienced significant foreign currency transaction net gains and losses in 1998. Nevertheless, the Company has experienced an increased amount of foreign currency translation adjustments in 1998. The devaluation of the baht and ringgit may cause the Company's competitive environment to improve. It is not possible at this time to determine what effect the devaluation will have upon pricing or costs, but management believes the devaluation will not have a material adverse effect and may have a continued positive impact upon the Company's operating results for 1998 and beyond."