mmm309

Myriad Genetics' Home Run Earnings Report

Additional reasons to buy include: no debt, 400m cash and sufficient
NOL that they will only pay alternative minimum tax. Long term mgmt
indicated they were looking to expand internationally but cautioned
there were headwinds re no central lab facilities in Europe.

Disclosure: long

Intuitive Surgical: Operating Well Even During Challenging Times

Thank you for the reply. I don't want to belabor the pt but I am
disturbed by what I think is a slight of hand.

I understand the 20m but not sure about how it will look in q2 and beyond. For simplity, lets say all 44 accts accept the offer to upgrade. ISRG will take in 6.6m in rev and cash and have to take a promo expense or marketing exp of 13.4m (I think).

Also, since this was q1 09 ending March 31 and the offer to upgrade was made in April, seems disingenuous at best to say that
they had a rev increase (incl the deferred rev) of 11% in q1.
I guess we'll see.
Megan

On Apr 19 08:23 PM Alan Brochstein wrote:

> I think I can explain the deferred sales. They had to clarify in
> Q&A, but it seemed as if everyone was on the same page at that
> point (hence 130 and not 100).
>
> The way I understand it is that the customers paid the regular price
> for the Da Vinci S. The Si has a $600K higher price I believe, but
> the company offered it at $150K to 44 customers. The company had
> to thus take that $450K difference and "defer" the sales. If you
> check the math, 44*450 accounts for that $20mm. IF the customer turns
> it down, THEN the company realizes the deferred portion. But, IF
> the customer does the upgrade, the company will actually receive
> an extra $150K in cash and recognize that portion in revenues. <br/>
>
> Isn't that pretty clear?

Intuitive Surgical: Operating Well Even During Challenging Times

I agree, DaVinci is a great system and
I would opt for robotic surgery if I needed
surgery. That said, I think their growth
will be subdued for a while.

EPS decreased 35% YOY and guidance
suspended is bad.

I don't agree that the deferred revenue
explains the miss. On the conference
call they fumbled all over this. The 10Q indicated that the customers have not acepted the offer of an upgrade yet; so how
is it deferred revenue if a sale has not been consumated? (see 10Q quote below) Customers have until June 30 to accept or decline the offer. Given medicare cuts that are coming it's doubtful
all will accept the offer even it it is at a substantial discount. And since it will be at a substantial discounts, they won't make their margins on those that do accept.
margins.

Management indicated that they plan to expand staff
in sales and R&D. 41 new FTEs. Seems like a lot.
If hospitals havn't bought DaVinci yet, why do it during
a recession. And as for multiple systems at existing
hospitals, it's more likely hospitals will focus on improved
scheduling or will run the existing systems more shifts before buying another.

Regarding their international sales, a strong dollar
will not help them and CHDX has the right to sell
DaVinci in China so that will hit their margins as
well.

The withdrawal of guidance coupled with sale by GS
of 1.4M shares at $106. makes me think, ISRG the stk,
may not be the growth story it was. Expect analysts
to lower EPS estimates for 09 and 2010.

Finally, I tried to go back and listen to the QA again but
couldn't. It cut off on multiple sites.

SEC 10Q Filed 4/17/09 "In April 2009,
we offered certain of our customers who purchased
da Vinci S Surgical Systems in the first quarter,
the opportunity to upgrade their recently purchased
da Vinci S Surgical Systems to a da Vinci Si Surgical
System. The upgrade is being offered at a
discount to its fair value. These customers
have been given until June 30, 2009 to accept
our offer.

Position - puts