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Author: brewer12345 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 216  
Subject: Congress passes scrip bill! Date: 11/21/2003 10:28 AM
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Both the House and Senate have passed a bill that sets a national standard for scrips and verifications. The verification process is exactly what CTAC already does, and there will be enforcement for anyone who doesn't follow the procedures. Scrips must be released at the time of exam regardless of whether the patient asks for it, and they must be good for at least a year. Looks to me like CTAC pretty much wrote the legislation. Given the landslide by which the bill passed both houses, I can't imagine the pres not signing the bill.

Looks pretty sweet for CTAC, guys.
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Author: trend2value Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 202 of 216
Subject: Re: Congress passes scrip bill! Date: 12/15/2003 2:45 PM
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Both the House and Senate have passed a bill that sets a national standard for scrips and verifications. The verification process is exactly what CTAC already does, and there will be enforcement for anyone who doesn't follow the procedures.

The President signed the bill into law on Dec. 8th, 2003.

I had looked at CTAC several years ago when they were making good money and buying back shares... I am surprised to see that they have been losing money recently. I don't understand why they bought the contract manufacturer of lenses, except maybe as a threat to Johnson & Johnson - maybe they were planning on making "generic" disposable contact lenses available prior to the time when J&J decided to allow them to become an authorized distributor...

It seems to me like the profitability of the business has been eroding from when they were able to earn around 80 cents per share... The Gross margins have been up this year but the operating expenses have also risen quite dramatically... I see 1 analyst has an estimate of $1.00 EPS for next year, that looks optimistic from where I am sitting... I see that advertising spending in 2002 had to be cut back to maintain some profits... and now ad spending is being increased... I guess that is a hopeful sign.

I don't have much confidence in this management team though. It looks to me as though the internet business has leveled off. I'm not sure how much other competition is out there... Just wanted to jot down my thoughts and see if anybody has any comments...

JTT

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Author: brewer12345 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 203 of 216
Subject: Re: Congress passes scrip bill! Date: 12/17/2003 5:14 PM
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I think you are missing the forest for the trees here. The company basically went into "survival mode" when they were fighting with J&J: very little ad spending, stockpiling contacts whenever they could buy them on the grey market, running the business on a cash basis, rather than a GAAP basis, etc. The past year has seen losses due to : higher ad spending (really an investment in future business, but GAAP expenses it all now), higher legal and lobbying fees (that bill wasn't free), selling off old grey market inventory that they paid a lot for, integration expenses for the two competitors they bought out, and the acquisition of the lens manufacturer. They bought the lens manufacturer as a bargaining chip to threaten the remaining hold out lens companies.

Personally, I continue to hold because I can clearly see rising revenue, expanding margins, and no significant remaining regulatory impediments to the business. CTAC is poised to capture a large share of a growing market, and will either become a category killer or (more likely, IMO) get bought out at a rich price.

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