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Biotech / Medical : ABAX --- lots of upside -- Ignore unavailable to you. Want to Upgrade?

To: PACKRATCAT who wrote (455)	8/26/1998 8:21:00 AM
From: Yo Yo	Respond to of 492

Very Interesting. This deserves a closer look. ABAX has been on the back burner as of late. I may get some time to look deeper today and get myself back up to speed. I'll post anything of interest. Yo Yo P.S. I think HMGN may eventually give them some competition in vet market, but it is quite a ways away. In the human market, they already have a jump on ABAX, but I think HMGN will be status quo until they finish absorbing the acquisition. They talked about moving manufacturing to a different location, that will give them plenty to do for a while.

To: PACKRATCAT who wrote (455)	8/27/1998 11:55:00 PM
From: Yo Yo	Read Replies (1) \| Respond to of 492

I took a little time to get back up to speed on ABAX. I also called Investor Relations to get a few questions answered. Here are some thoughts. The run up in stock price a while back was short covering, presumably the holders of convertible preferred shares had hedged. With them out of the way, there is little to drive price up at present. Company is still burning cash. Margins are acutally getting worse because money losing disk business has just taken over machine sales as their major source of revenue and they lose more on disks than on machines. They have enough cash to get through the end of the year. They are lookinginto a sale/leaseback of the new automated disk line to raise some $$$. This is good. They don't plan on doing a secondary stock offering until some time next year. Hopefully when they can show some better business results at that time. New automated disk machine has arrived (we know this) and is being tested (we know this too). Testing will not be quick, there are 40 steps to completing a disk. Lots of tweeking required, don't look for any benefit this quarter or next either. Lots of different disk configurations to test too. However, once that baby is up and running it wil be a big $$$ saver & capacity increase. Could not get Inv Rel to tell me what kind of margins they expect once running, but I expect they will be good. Japanese sales have tanked. Weak Japanese economy, strong dollar. Won't see much in the way of German sales this quarter, will start next. They are taking much business from Idexx in vet market still. Machines in the field are getting good utilization. Disk shortage this quarter due to raw material issue and shutdown to install automated machine. Still they are selling lots of disks and will sell lots more. Inv Rel had not heard of the Dade Behring unit, but then Dade was not selling to vet market. He gave me the name of a guy to call to get more detail about their competition and relative competitive position. I've not called yet. I don't see the stock going anywhere upward any time soon. I'll set on the sidelines until I see that new razerblade maker (automated disk machine) start to crank out some low cost disks. That's about it. yo yo