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  • mitis1st mitis1st Dec 18, 2008 6:08 PM Flag

    FY09 HIFU Sales - Est. $57m

    CMED is really ripping off shareholders with this transaction. Brean Murray estimated $57m in HIFU sales for FYE March 2009. With 70% gross margin for HIFU indicated on the CC, let's assume a 30% net profit margin for HIFU to be conservative. This would mean $17m in net income from HIFU, which means that the CEO paid about 3x Net Income. This is ridiculous! The increased R&D for clinical trials (~$20m) and decline in HIFU sales would have to be significant going forward to warrant such a depressed valuation.

    I would encourage all CMED shareholders to write IR about this, and possibly the SEC because it seems there is a clear conflict of interest in this transaction. This is not consistent with management's fiduciary duty to shareholders, especially given that management divulged nothing on the CC about the HIFU transaction.

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