Thursday, August 11, 2005
On the good side, it's not a mousetrap; it's a replacement for a more expensive existing mandatory process. It also has regulatory approval in the US and Europe. It has a lot of good characteristics (small, easy to use, reduces volume by 90%). There is a large $10 billion total available market worldwide that is dominated by waste haulers (80%). They are focusing initially on dialysis centers, which is probably a good idea.
On the bad side, P&L is still absolutely terrible. Revenues are ramping up by about 25% per year, but gross margins are only 18%. R&D and SG&A are still more than 2 times total revenues. They might have enough cash to sustain them to profitability if nothing goes wrong.
They hired a sales guy in mid-July. They sold two units in Greece in June, a small unit in the US Virgin Islands (are their sales people focusing on places where they want to go?)
I plan to do some more work on this.