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Biotech / Medical : IMAT - ultrafast tomography for coronary artery disease -- Ignore unavailable to you. Want to Upgrade?

To: RDH who wrote (2660)	8/14/1998 10:18:00 AM
From: Bruce Rozenblit	Read Replies (2) \| Respond to of 3725

The stock traded down 1/16 this morning on 100,000 shares. This tells me that the market is reacting to the balance sheet the same way I did. They sold 6 machines and still lost money. What is the problem? The market is telling us that it has lost confidence in management. There have been so many false starts this is like the story of the boy that cried wolf. Nobody believes any predictions. They just want to see positive numbers. Notice that the historical numbers have been changed to remove the losses from HeartScan. That's a marketing ploy and investors don't like those kinds of tricks. I am concerned about service revenues. The stated cost of service greatly exceeds the revenues, this quarter by $300,000. It never has been positive. Service is typically a gold mine, but this company shows continuing losses for service. Maybe they have a lot of warranty repairs on the machine and that is costing a lot to cover. I don't see any line item breakout for Positron. Maybe it is lumped into "loss for continuing operations". It would be nice to know how much of a drag it is placing on the company. I fear that management is more concerned with being in the "investment banking" business than in making and selling scanners. Every time we turn around they've got their fingers into another scheme that loses money. The payback is supposed to be two years from now, but it never gets here. My biggest fear is that as soon as they actually make any money, they will spend it on another "growth" idea and the balance sheet will hover at zero profit. If business picks up, instead of adding a second shift on the shop floor, they will probably double the size of the shop. California is a "special" labor market. If they made the machines here in the midwest, cost of overhead would easily drop 20%. I've said it many times before, the market doesn't care anything about revenues, only profits. Profits don't exist yet and that is why the stock is below $2.