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Biotech / Medical : The Stock for 1999(Polymedica)PLMD(Medical Supply Co.) -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Radley who wrote (1701)	8/8/1998 1:40:00 PM
From: Arthur Radley	Respond to of 3414

To All: "Tis moving weekend for the Dude, so my wife has given me a 15 minute break to give this update. In the past two weeks, Cruttenden Roth, Josephthal and Jesup & Lamont have each release new reports on PM. Based on the quarterly report, they all have nothing but positive things to say about the numbers.In that their reports total about 24 pages, I'm only going to give a brief summary of what I think are the high points of the respective reports. I will start with projected prices first: Cruttenden Roth.....1998 share price of $15.00 Josephthal..........In 12 months a price of $18.00 Jesup & Lamont......18 month projection of $20.00 Cruttenden had this to say about the quarterly report. ..Cash increased to $9.8 M to from $6.8 M ..AR's dropped over $4M ..Days sales outstanding(DSO) dropped to 75 from 89. Management appears comfortable with the DSO level in the mid-70's, but could look to cut that to the lower 70's mark over time. ..Looking ahead, we see a significant opportunity for the company in the Type II market, almost as if they have recreated another Liberty Medical business, entirely. From Josephthal. "We are clearly pleased with PM's performance in the quarter, and we expect this performance to be carried on throughout the year. LIBERTY IS DISCUSSING WITH A NUMBER OF VENDORS THE POTENTIAL ADDITION OF NEW PRODUCTS TO ITS CATALOGUE AND HAS REPORTED INITIAL SUCCESS WITH AN IMPOTENCE AID RECENTLY MADE AVAILABLE TO ITS TYPE I CUSTOMER BASE, a patient population prone to such disorders.(This is news to me that they are now selling such a product) "We note that Liberty has begun advertising for Type II diabetics, so that any incremental sales volume will reduce PM's cost-per-television advertising lead. Further, PM built a database of Type II's who had responded to Liberty ads. Liberty has been contacting those leads to offer them service. RESULTS THUS FAR HAVE BEEN POSITIVE." From Jesup & Lamont. We estimate that LM currently has a customer base of almost 100,000 diabetics. With the addition of approximately 2 million Medicare eligible Type II diabetics and only a 10% market penetration of Type I diabetics by direct mail suppliers, PM is positioned to grow LM's Type I and II customer base by 10,000 customers per quarter for at least the next two years. As a result of these continuing strong growth trends, we are maintaining our earnings estimates for fiscal 1999 and 2000 at .70 and .99 respectively. LM has now generated 7 consecutive quarters of sequential sales growth.More important, we anticipate improved profitability as LM benefits from its recent investments in personnel and information systems that took place in the first quarter. PM will continue to spend approximately $1M per month on Cable TV advertising. PM has modified its amortization schedule for direct advertising costs from 7 to 4 years. Since both the 7 and 4 year amortization schedules are accelerated equally for the first two years, the accounting change will not impact fiscal 1999 net income. We believe the fact that management has switched to a more conservative amortization schedule, is indicative of management's confidence in PM's future earnings prospects. Currently, PM is conducting an active search for strategic acquisitions of complementary businesses or products. We believe that in fiscal 1999, PM may consummate a deal with a LARGE MANAGED CARE COMPANY TO HANDLE THEIR DIABETES CASE LOAD. All cap's are mine, and these are only highlights, but IMO they show positive benefits as to why we should own PM shares. Thanks to Karen M for providing we with this information. Have a good weekend. Back to packing (:<<<<).