Bigbro1, I addressed the Tappan percent in my last post. For whatever reason, 0.15% is reported separate from Tappan.
Is the loss of Avid's largest customer going to cause Avid to fail? I don't think so, since other existing orders can carry Avid financials while new customers are subcribed. Avid now has capacity to add new customers while filling orders from Halozyme and can implement that second Myford expansion that was put on standby if there is supportive customer demand. The market has been noted to carry high demand for mabufacturing (sellers market?) of the nature provided by Avid, so subscribing new customers in line with Avid capacity becoming available seems realistic and a normal and necessary part of Avid operations. Complete loss of Halozyme sales without new orders would compel PPHM and Avid to size down accordingly, just as new orders would support growth.
Do we agree that PPHM being positioned to be self funded, limiting research outlays to staying within the support base of revenues is the underlying critical issue? The fast Avid sales growth of the last four years is plateauing, absent subscription of new Avid customers, so PPHM needs to plan for R&D budgeting within this smaller envelope in the event new orders don't materialize. The $7 million reduced payroll costs that included the cutting of the PPHM research team by half, to eleven, appears to be structured for self funding within the envelop of projected Avid sales for FY 2018 ($50 to $60 million), but investors have not been shown the math details. Presuming that Avid preserves a gross profit of about one third of sales and presuming all Avid employee costs are balanced within that margin, self funding from operations means non Avid payroll, office Administrative, trial support costs etc. need to be limited to $15 to $20 million annually, going forward. Less if Avid sales drop, more if Avid sales expand. The PPHM recently announced cost control measures appear structured to support this balance, such that issuance of new shares to support research, at this point in time, does not appear to be needed. Absent a compelling cause, like supporting operational cash flow that gets upset during surprise, temporary events, issuance of new shares should not be done, IMO.
Now that PPHM appears to have "hunkered down" while seeking new Avid sales, what does Ronin have to offer that isn't already in motion?
Best wishes and IMO.
KT
