Had a male CEO exhibited such a pitiable performance over many years, would he still occupy the chair. Are we, perhaps, dealing with a BOD frightened to dismiss the CEO because that CEO is female? Would the BOD prefer to allow for a total loss rather than be accused of gender discrimination?
I ask you, is it good for the cause of female CEO's if they must be kept on despite catastrophically bad performance? Would not BOD's be reluctant to hire female CEO's if they can't then fire them? Must one ride with a female CEO all the way to bankruptcy?
Well, given the $50 million breakeven number, which they have no chance of achieving anytime soon, it's pretty clear the company is going to have to be sold. It would be foolish to run down the cash, issue new stock and/or take on debt for more than a couple of quarters. A larger diagnostics company could fold the PDI product line into an existing portfolio, and thus drastically reduce costs.
So, my advice is: fix up the assets as quickly as possible and sell it all some time in 2016.
That said, Lurker has blown through $100 million. Has she learned her lesson? She's not getting another job, that's for sure. If the value of her stock goes to zero, she's going to be running a register at Walmart. Does she realize this? Has she learned her lesson?
The end may come more quickly than anticipated. The BOD should accept any reasonable offer at this point, because the alternative is nothing. NL's plan is unworkable given the need for $50 million of revenue. It's patently obvious.
The remaining assets of this company clearly might be of value to an existing company, whereby the products could be added to an existing cost structure, ie an existing lab, sales force, management, etc. Someone might pay PDI $2 to $3 a share right now for those assets. The alternative is clearly zero for existing shareholders. It doesn't take a financial genius to make the right move here.
I've given may advice on this board for years. It's been studiously ignored. Will it be yet again?
I think the timeline is much more compact than NL would have us believe. I see little chance the company makes it through 2016. I think the stock price will reflect that fact sooner rather than later. The longer they wait to sell the company, the lower will be the bids. The turnaround plan is unworkable. To continue with it will cost the shareholders everything. I'm guessing the most that NL will be able to hold onto her near $1 million salary is another 12 months.
That seems to be the next step. Management is a complete joke. They literally blew $110MM since Lurker has been CEO. Where are the class action lawsuits?
Sentiment: Strong Sell
this is totally unbelievable - as someone else posted - value destruction on a level never before seen.
selling CSO where it represented $34 million of Q3 $36 million revenues...that leaves about $2 million/quarter in revenues. expenses were up in the quarter because of Interpace, and that's what they are going to focus on?
bend over folks, because it will get worse...and Lurker and crew will continue collecting their ridiculous compensation for this destruction.
I have never laughed so hard!
Your management has screwed you over - whatever DRAD was going to offer would have been better ... but that would likely mean management would be out, and they were not going to let that happen. So, what to do? Screw the shareholders to do what was best for management.
I am extremely surprised that there are no ambulance chasing attorneys showing up.
PDI has been a profligate spender, both before and after NL joined. There was no mention made of big cost cuts during the conference call. It took the shock of a stock plunge to 50 cents to prompt even the modest cuts announced recently.
The facts are pretty straightforward. If revenue for 2016 is going to be $12 million, then costs shouldn't exceed that. Costs can't be $40 million or $30 million or $20 million or $15 million if revenue is $12 million. The CFO needs to present these facts to NL. If he can't do that, find someone who can.
If the numbers can't be made to work,the company should be sold. It's not a complex problem folks.
You must have suffered brain damage taking it up the #$%$! When PDII bought RedPath they reported RedPath had annual sales of $10M off of their Pancreatic test. Now PDII reports in their 3rd quarter earnings release that they expect that 2015 Interpace earnings to be $9M to $10M counting both PancraGen and their Thyroid tests BAHAHAHAHAHAHAHA. They drove this business down $2-3M given the thyroid test posted $2M under Assuragen. Poor Nancy, Greggy, and Sono (aka NanGreg)!
The company hasn't issued any kind of new guidance yet, which leads me to believe that the such guidance would show the operation is not viable at present, even after the cost-cutting. I think the worst-case scenario, and the one which the market fears, is that they will spend all the remaining assets (present and future), and then borrow their way into bankruptcy.
If potential acquirers believe that is what will happen, they will hold off on making bids, believing they'll be able to acquire PDI's assets in BK at a lower price. That's why it's really imperative that the company be sold now.
Will that happen? The BOD would have to assert its authority over NL, and stop her before it's too late. That hasn't happened over the past 5 years.
These are the altruists who dumped a steaming pile of Redpath on PDI. They got some stock and a board seat as a result. I'm wondering if they might not take all the cash given to them by PDI and buy PDI. That would be the most beautiful transaction ever executed.
They paid more than $31 million to owners of Redpath and Asuragen. Now, PDI is worth $14. NL managed to destroy half the value of these assets in 12 months (and I'm not counting the cash on hand, which will be vaporized shortly).
BOD trying to cover their as*es now... oh well, I don't care. I am simply glad that they are cutting out the cancer and hopefully setting this up for a sale. Sadly, I need $1.50 to breakeven. Ugh.
Totally agree. It's really incredible, but the malpractice started even before Lurker. Remember Elidel?
The bottom line right now is this: This is definitely not a development level diagnostics company. This is a company with products on the market. Companies with approved products shouldn't be making losses. If they are, they aren't viable and should be sold.
If PDII is making losses due to mismanagement, that problem should be relatively easy to fix, withing a couple of quarters. If that's not the case, and there are no obvious solutions to existing problems, the company is not viable and should be sold.
PDII payed at least $31 million within the last year for assets which are now worth $10 million. Did they overpay? Did the assets lose value? Or, is this mismanagement?
We also don't know what the cash position will be going forward. It would be insane to run this business with more than minor losses. It would be insane to issue new stock. It would be insane to take on new debt.
At least we can be fairly confident Nancy Lurker won't ever manage another company again. What a bad hire by the board. And then the Board had a complete lack of oversight for 7 years while management blew through all the cash and destroyed the company. This could be a test book case study in business school. How to destroy a ton of cash due to a complete lack of leadership from the CEO and Board.
Sentiment: Strong Sell
I see from their previous filings they keep revising the Diagnostic revenues down. They will use the cash to pay the Executive salaries while the shareholders are stuck with a dying business.
Took a flyer today. I figure that Lurker and the other insiders are going to find a way to salvage the couple million shares they own.
Where are the lawyers with the class action lawsuits? Can you believe management? They bought a company with $10MM in annual sales, and after getting the tests approved by several insurance companies, the annual sales are the same or slightly less. What a joke.
Sentiment: Strong Sell
Well, given the fact the company is now much smaller than previously, I would think that the executives would be due for a pay cut, or a transition to more incentive-type compensation. Lurker should voluntarily renegotiate her contract. She can't be taking nearly 10% of the company's revenue in take-home pay.
If the goal is to spruce up the company and then sell it, it's imperative that PDI not incur new debt. The reason, and I've seen this before, is when that potential acquirers see the debt, they simply sit back and wait to acquire the assets in bankruptcy rather than bid for an ongoing concern. It's entirely logical.
I've watched Lurker for some years now, and it's important that someone step in and stop her if her plan is patently unworkable. She will keep on going until there's nothing left. That's her MO.
I address this to the BOD: If PDI can't hope to achieve the kind of revenues necessary to reduce losses to zero within the next couple of quarters, it would be far better to recognize that fact now, while there's still some value. Under no circumstances should this company incur additional new debt.