Tomorrow we will see $9.00!!!
This is not a productive comment. 747 has is entitled to his opinion as well as you. Lets keep this forum civil.
I did. A/R grew a lot because sales grew a lot. In Q4 sales grew a lot again. If A/R will go down for Q4 then at least we will know that accounting department doing a good collection job :)
In my humble opinion when company experience growth in sales its receivables grow as well. Since we do not have Q4 Balance Sheet my guess is as good as yours. However, what if receivables increased as well (as they normally would? :)
" ... they will still have to account for the money they spent on retiring debt, executing the convertible, and hiring new sales staff."
From prior CC we already know that company spent $70.4M to retire debt. As to hiring new sales staff we will find out during the CC following release of earnings. Nevertheless it does not change my "fuzzy" math since I am not looking at P&L. I am looking into increase of cash on hand. From press release we learned today that " Preliminary unaudited cash and cash equivalents at December 31, 2013 were ~$80.5 million". So cost of new sales staff does not change my calculations. Nevertheless, we got a great news today and I am long long term long :) So I am pretty happy anyway.
I quick look at Balance Sheet for September 30, 2013 show that HZNP had Cash and Equivalents at $58.65M. According to press release today they have now around $80.5M. Proceeds from refinancing transaction were around $19.7M that leave us with approximately ($80.5M - $58.65 -$19.7M) $$$2.17M in earnings for Q4. Does anyone see any mistake with my calculations?
Current debt is technically ZERO.
On November 15, 2013 HZNP issued convertible senior unsecured notes due on November 15, 2018 for $150 million aggregate principal amount of 5%, in a private placement. The initial conversion price of the notes was approximately $5.36 per share.
A portion of the proceeds was used to enter into a capped call transaction in connection with the offering, which has intended to reduce the dilution to Horizon’s common stock upon potential future conversion of the Notes, raising the effective conversion premium to the company to 50%, or approximately $6.71 per share.
Net proceeds of the offering after deducting fees and expenses were approximately $143.8 million of which $70.4 million was used to payoff all the obligations under then existing senior secured notes, $35 million was used to pay AstraZeneca for the U.S. rights to VIMOVO, $18.7 million was used to pay the cost of the capped call transactions, and the remainder which was approximately $19.7 million wsa used for working capital and general corporate purposes. So if my understanding is correct no debt and around $80M cash in the bank.
If you will look at HZNP short interest for the past 12 month you will see the following picture:
On January 15 2013 it was 5,862,837 down by 1,158,597 shares
On May 31 2013 it was 4,417,080 down by 1,445,757 shares.
On June 28 2013 it was 4,763,168 up by 346,088
On July 15 2013 it was 5,086,243 up by 323,075
On November 15 2013 it was 5,530K up by about 444K
Then things change in late November and early December and on 12/312013 it grew to 9, 856K and by 01/15/2014 short interest increased to 11,902,574 which if compared to November 15, 2013 it more than doubled (or 6,373K extra shares were shorted). Since current float is 35.84M shares, current short interest is over third of common shares in circulation. If managements projection are correct (and we longs hope that they are) once companies result would be announced then smart shorts will cover since we will get shorts squeeze. Just think about risk and reward for your invested dollar. Do you really believe that should HZNP prove that it can break even in 2014 it will go down to 2013 low of around $2.00 or move higher than $8.00? The choice is yours.
Short interest increased from 9,856K shares on 12/31/2013 to 11,903K shares on 01/15/2014. I guess more fuel for the coming rally (should earning be in line).
I did not hear one single negative answer from the management during CC. Most importantly, management response on a question if Intel chips would be competitive to competitors in mobile SoC chips market an answer was yes for both. All short that are jumping up and down of the new that Intel "miss" on earnings one penny I have news to you - it does not matter. For us longs what is important that Intel is a leader in PC and data centers and in short few months will be a leader in mobile space as well.
Additional 475k shares were shorted from 12/15/13 to 12/31/13. Total short interest stand at 9,855,793. I guess the more fuel for coming stock rally the better. Let them burn.
In the past three months CEO exercised about 294K options at zero cost. During the same period of time he sold 277K shares (or 95%) at around $12-13.00 per share. Since Bruno as of January 6, 2014 had 517,740 shares, he reduced his KLIC portfolio by 35%. Obviously that act could be considered as a vote of confidence in the things to come. Mr. President, on behalf of all longs (and I assume employees of the corporation) I would like to thank you for selfless act of loyalty to us all. I guess we have to wait for another week or so to see how bad things really are at KLIC.
Since we see no news, my guess we see a short squeeze. Otherwise someone with access to Bloomberg terminal saw significant increase in both drugs sales or it might be a buy recommendation from a major brokerage house.
On adjusted basis HZNP should beat estimates by few pennies unless we will get a big positive surprise due to large order for Lodotra. Since Director Jeffrey Bird just purchased another 669K shares of the stock (most likely because he has access to Bloomberg terminal and hopefully the sales are increasing( and not because he has insider information :)) it gives me confidence that company is doing fine increasing sales volume. However, employee related expenses should increase dramatically. So my guesstimate is a loss of 7-9 cents.
Sentiment: Strong Buy
If that purchase is not a vote of confidence I do not know what is. Shorts are so screwed. Thanks a lot for the post!!!
Sentiment: Strong Buy