Your premise about cash is logical. However, good management's often zig when others zag.
Your contention that they are looking more to R&D, however, I find unsupported by the evidence. The company has not increased its R&D spending ratio in recent years, using it instead as a source of margin growth as revenues have risen.
The Company believes that a well-targeted research and development program is an essential part of the Company’s activities, and the Company is currently engaged in a number of research and development projects. The objective of the Company’s program is to develop new products in the Company’s current product lines, improve current products and develop new product lines. Recent major development projects include, but are not limited to, inflation devices for balloon catheter dilation, stent deployment, tissue displacement and fluid dispensing; inflation devices for orthopedic procedures; advanced contact lens disinfection systems; product-line expansion in ophthalmology; product-line expansion for MPS2 products; products designed for safe needle and scalpel blade containment; and the integration of needle-free technology with fluid delivery products. The Company expects to incur additional research and development expenses in 2008 for various projects.
(Note the final sentence)
From the 2Q earnings announcement: This increase was achieved despite a 10% rise in R&D spending in the current year quarter, compared to the same period last year, aimed at accelerating product development in ophthalmology and inflation." Mr. Battat concluded, "
Clearly not a huge increase, but ATRI has done an excellent job of tweeking products to target their markets.